Deutsche-Bank-Chef bei Banken im Umbruch: „There are too many banks“

Es ist ein sichtlich entspannter John Cryan, der am Mittwoch das Podium betritt. Es ist sein erster Auftritt auf der Handelsblatt-Tagung „Banken im Umbruch“. In angelsächsischer Tradition verzichtet der Brite auf eine Autorisierung des Interviews, das von Handelsblatt-Herausgeber Gabor Steingart auf Englisch geführt wurde, und damit auf eine nachträgliche Bearbeitung des Gesprächs. Es gilt das gesprochene Wort.

Mr. Cryan, you are the new kid on the block. Do you like Germany?
I do like Germany, but I liked Germany before I came. I still like it now that I am here again.

How does it feel to fill the shoes of bankers such as Anshu Jain, Jürgen Fitschen and Josef Ackermann, who were all former Deutsche Bank CEOs?
There are some very big shoes to fill.

In your introductory comments, you just talked about consolidation in the banking industry. Have you ever met Commerzbank CEO Martin Zielke?
I have met Martin Zielke.

Do you like him?
(Cryan smiles.) I do like him, yes.

You mentioned consolidation is a priority for the banking industry. What does it mean in concrete terms?
If we look at Germany in particular – and I take Germany as an example – it hasn’t gone through that wave of consolidation that very recently Spain has seen. Italy seems to be moving in this direction, and France has already been through it. But in Germany, there are too many banks. That leads to very strong price competition, which is good for customers, but less so for the solidity of the banking system. So I think Germany should consider, particularly some of the smaller banks, in teaming up and investing in the modernization of the system. Since we (at Deutsche Bank) have more resources because we are bigger, it is easier for us to do it on our own.

That sounds nice, but in concrete terms, that would mean cost cutting, job losses and political trouble. Do you think Deutsche Bank and Commerzbank would make a nice couple?
You wouldn’t expect me to answer that, given some rumors that have been run this morning.

But the option is on the table – or is it not?
We set up a strategy (Cryan refers to Deutsche Bank’s own restructuring plan). I think it wouldn’t be inappropriate to say that everyone in senior management in Deutsche Bank is working blatantly (on it). We have a lot of work to do and have a lot of ambitions to modernize the bank to make it really relevant for the 21st century. We track something like 170 individual tasks that comprise our strategy. We really want to make sure that we get on with it and do those things. I know the regulators may be listening, so I need to emphasize: We are not deviating from our really big book of work. We are concentrating on it to get it right.

That means you are pursuing your restructuring strategy on your own, right? You are not looking for partners in the German market?
No. And I don’t need to remind you that part of our work that we are doing is to make our bank a bit smaller in order to make it a bit simpler, because we want to set higher standards for control and we also want to be more successful.

In other words, you are focusing more on the sell side, for example trying to sell Postbank, the retail banking chain that is based in the nation’s post offices.
Postbank is the biggest one. But some days ago, we sold a bank in Argentina. There are a lot of pieces of the Deutsche Bank Group that no longer make sense in the context of the Deutsche Bank today, including Deutsche Postbank.

But a lot of CEOs, not only in banking, think it is a sign of success to acquire others, to become bigger. Do you think the time will come back when you are again looking for acquisition targets in the United States or in Asia?
Not any time soon. Probably not in the U.S.

So first you are doing your strategic homework here at home. How many jobs at Deutsche Bank are at risk?
We employ more than 100.000 people in the group today. And if you compare that with some of our main competitors, like for like, we should be running at 25 percent to 30 percent less than we are. (...)

The last time we met was in London on June 23 on the day of the Brexit vote. What do you think now about London as Europe’s financial capital after the Brexit vote? Will Europe’s banking capital still be in London in 10 years?
I think so, but I think it will be very different. (...) I think it is important for the bank to respect that we really need to follow our customers. And in some of our trading areas, London is our biggest trading hub. We trade a lot of papers and derivatives in the Eurozone or in European Union paper. And although we are passported into the U.K. – and U.K. authorities are very keen that we continue passporting – our clients might take us back into the Eurozone or into the European Union because they may demand that we transact with them with a European Union entity. (...)

In your introductory words you mentioned Handelsblatt and Mario Draghi. You like Mario Draghi, but hate his monetary policy. Is this right?
I think we should have a debate about pros and cons of using monetary policy predominantly on its own to solve some of the issues we face today. And I am thinking about negative interest rates in particular – less the quantitative easing program (QE). QE does distort markets a little bit. The negative interest rates do have potential effects which need to be thought through carefully. And I think especially for pension funds and the insurance industry, if interest rates stay low or negative for a long time, then we will face difficulties funding our pensions.

For a bank, it is a paradox that the government is asking you on the one hand to set more money aside in reserves to bring more stability to the banking system, but on the other hand, you have to pay for it.
Yes. Banks are being regulated to have deposits. But taking deposits is less and less attractive for banks.

How much money are you losing per year because of that?
We haven’t published concrete numbers as we don’t know exactly how interest rates will develop, but it is in the hundreds of millions of euros per year that we are losing. We have a huge book of deposits.

What does it mean for the stability of the financial system? How long can that be a sustainable?
I think that varies a bit. If you take a big bank like Deutsche Bank, you have the ability to withstand negative interest rates much longer as we have a diversified business with asset management fees, transaction fees, trading businesses. And they are less affected or not affected. But our core banking business is. And at these margins with deposits, you will make losses. Because the money is parked at the central bank, you can’t use it elsewhere. For a simpler, more monoline bank that is taking deposits and lending it to clients, mortgages or consumer finance, it is more difficult. They have to charge more on the asset side for lending. Because you can’t really charge retail customers a fee or much of a fee for making deposits. I think at Postbank we finance it in charging some account fees, but which are modest as you also get a service. It is modest in relation to the service you get. But for pure deposits, it is hard to charge a fee.

Not a way to make yourself popular.
It’s because they will not deposit in that case. But we do need the money because this is an important source of liquidity for the sector. So I think banks will have to absorb that cost for taking deposits and try making up for some of the costs in charging a little bit more for lending. And that is the reason why I think the transmission mechanism with negative interest rates isn’t working. That is why I am a bit critical with the ECB policy.

You see the virus of a new financial crisis as the outcome of that policy?
No, I am more optimistic there as people are watching this carefully. I think the ECB, they obviously are monitoring it carefully. (...)

Coming back to Deutsche Bank. Do you think the Deutsche Bank will ever be great again?
Great has two meanings in English. One is just very big. And we are already very, very big. The other meaning is: Can I be proud of the institution like people once were? And the answer is: Yes. It is why we turn up to work. We intend to work hard to achieve that aim. Not great in a sense that is inappropriate, in a sense that the bank has been accused of being a little bit aggressive and arrogant sometimes. But it is to make the bank an institution that not only the people in the bank are proud of, but the whole nation can be as well.

Mr. Cryan, thank you for your insights. Thank you for being with us today.