The new designated chief executive of Deutsche Bank, John Cryan, raised expectations on Thursday that he may pursue a more rigorous regime of cost-cutting and restructuring at Germany’s largest bank than previously announced.
In releasing upbeat second-quarter results that were weighed down by €1.2 billion in legal costs to the bank from April through June, John Cryan, a former UBS chief financial officer, signaled that he would look far and wide to cut costs and steer the bank to more sustainable profitability.
While the bank boosted revenue by 17 percent in the quarter, a sign he said of its “fundamental strengths,” Mr. Cryan, in a statement to shareholders, said the challenges were “evident in the unacceptably high level of our costs, our continuing burden of heavy litigation charges, a balance sheet that must be more efficient, and the poor overall returns to our shareholders.”
Mr. Cryan, a U.K. native, took over on July 1 as co-chief executive of the Frankfurt-based bank, along with co-chief executive Jürgen Fitschen, who will leave management next spring, putting Mr. Cryan alone in charge. Mr. Fitschen’s former management partner, co-Chief Executive Anshu Jain, left the bank at the end of June after investors reacted coolly to the bank’s restructuring plans last spring.
That strategy included closing some 200 branches in Germany, exiting 7-10 countries and cutting as much as €150 billion from its balance sheet in investment banking. Yet it underwhelmed most investors, who had hoped the bank would be more ambitious.
Mr. Cryan made clear that nothing was off limits to him in his search for savings and efficiency, though he offered few concrete details Thursday and instead promised his own full report by the end of October. “We must critically review any countries, business lines, products and relationships that are unattractive.”
In a conference call with financial analysts Thursday afternoon, he acknowledged the impatience of many shareholders. “This is no longer about words, but deeds,” he said. “So while I ask for your patience … rest assured that we are already in implementation mode.”
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