Frankfurt Despite the war in the Ukraine and the unexpectedly high inflation, Deutsche Bank considers its return target of eight percent to be realistic. “We remain confident of achieving this goal at the end of the year. That is our full focus,” says the speech published on Wednesday by CEO Christian Sewing for the virtual Annual General Meeting on May 19.
The goal also requires “that we do not let up on our cost discipline, especially since we are feeling increasing cost pressure,” admits Sewing. This is due to the economic consequences of the war in Ukraine “with supply bottlenecks, currency fluctuations and significantly higher inflation rates”. The goal of achieving a cost/income ratio of 70 percent by the end of the year is therefore “more challenging”.
Sewing also addresses investor concerns that the bank may need to increase risk provisioning for potential loan defaults. “I can assure you that we are keeping an eye on the risks.” The bank’s economists had already warned last year of permanently higher inflation and early on of a recession as a result of the Ukraine war.
“The economic risks are real and they’re growing,” Sewing said. The bank therefore also “noticeably increased” risk provisions in the first quarter. The bank will “react appropriately if the environment changes.” Sewing also emphasized the business prospects the bank will have in the future. In his eyes, the climate-neutral restructuring of the economy is one of the great opportunities.
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At the annual general meeting, the head of the supervisory board, Paul Achleitner, will give up his post. The Dutchman Alexander Wynaendts, longtime head of the insurer Aegon, is ready to succeed him.
Achleitner describes Wynaendts as the “optimal candidate” who brings with him comprehensive expertise in the financial sector as well as a focus on technology and innovation. In addition, he has experience with supervisory authorities and control systems as well as an understanding of the international financial markets.
Bank sees no concerns
The fund house Union Investment does not want to choose Wynaendts because of the number of his mandates. He sits on the supervisory board of Uber and Air France-KLM and heads the supervisory board of the family holding company Puissance. He also advises Salesforce.com.
The bank rejects the concerns: “The time budget of the proposed candidates was of course a central part of the nomination process. The Supervisory Board is convinced that Alexander Wynaendts will be able to devote the expected amount of time to his work on the Supervisory Board,” said a spokesman.
More: Union Investment does not want to elect the new designated Deutsche Bank chief supervisor