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Capital Markets

Breaking views: Deutsche revamp falls short of strategy

Josef Ackermann is giving Deutsche Bank a spring clean. He has streamlined the board and reaffirmed an ambitious return on equity target in the face of mounting doubt about its feasibility. He is preparing the bank he leads for hefty restructuring and job cuts. That might be what it needs but is not in itself a strategy.

Deutsche has long been seen as overstaffed in many areas. Its revenues per employee are among the lowest in the industry. And people familiar with it say it has a tendency to over-invest in extra bodies when a big piece of corporate business comes its way.

The decision to put the corporate and investment bank under two global heads, Michael Cohrs and Anshu Jain, apparently stems from the view that tough action is required to enhance productivity.

But Ackermann's latest push isn't entirely about costs. He is also acknowledging that Deutsche has lost ground in its home market. Bankers from different parts of the empire pitch ideas to German industrialists, ignorant of what their colleagues are up to. This approach hasn't gone down well with potential clients. Moreover, sometimes Deutsche's relationship with German business has seemed detached.

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