Ratings upgrades set Deutsche Bank up for its measurement year
Now back at single-A with both leading rating agencies, Deutsche hopes to win more business and improve margins as investors await their share of the returns.
It has been another good year for Deutsche Bank as it continues the transformation plan first laid out in July 2019 to substantially reduce risk-weighted assets; get out of businesses where the bank is not a leading player, notably equities trading; invest in technology and controls; and all while still cutting overall costs.
That has left it heavily dependent through the first two years of the pandemic on an investment bank focused on fixed income and currencies (FIC) trading and debt capital markets, though one that has somehow managed to grab a reasonable share of equity capital markets business and harbours ambitions to grow in M&A.
In the first nine months of 2021, the group reported revenues up 5% on the same period in 2020; adjusted costs, excluding transformation charges, down 4%; a cost/income ratio of 82%, down from 87% a year previously; and a return on tangible common of equity of 5%, up from zero.
“We are really pleased with the progress we are making,” says James von Moltke, chief financial officer.