Deutsche Bank Stock Up As New CEO Indicates Speedy Recovery
Zacks Investment Research | Apr 08, 2018 11:06PM ET
Shares of Deutsche Bank (DE:DBKGn) Aktiengesellschaft (NYSE:DB) have gained 3.4% in the pre-market trading session as its new chief executive officer — Christian Sewing — is all set to revamp the bank through some “tough decisions”.
Prior to this appointment, Sewing was a member of Deutsche Bank’s management board since 2015. He oversaw the bank’s private and commercial bank segment, which includes the Postbank retail banking unit.
In a letter to employees sent today, the new CEO said, “We have to make decisions faster and more clearly, we have to collaborate better, and we have to put team spirit at the heart of what we do.”
Pointing at the slow turnaround of the bank so far, Sewing motivated its employees and said that the bank would be aiming for higher revenues and drive improvement in all the business segments. Further, he stated that there would be no compromise on the expense front. Adjusted costs are expected to remain within €23 billion in 2018.
Moreover, he said, “Setbacks like in the fourth quarter of 2017 are not to be repeated under any circumstances.” He also informed his employees that the bank’s internal processes will be revised in order to remove “bureaucracy and duplication.”
Other Leadership Changes
Former CEO John Cryan was removed from his position prior to his planned termination in 2020 as the shareholders had lost hope on his ability to turnaround the bank’s performance. Also, Marcus Schenck, the co-head of the investment bank, will be leaving the bank.
Garth Ritchie will be leading Corporate & Investment Bank solely, henceforth. Also, the Private & Commercial Bank will be led by Frank Strauß who was previously its Co-Head along with Sewing.
In a year's time, the company’s share price has lost more than 14% on the NYSE against 14.8% growth recorded by the industry .
Deutsche Bank carries a Zacks Rank #5 (Strong Sell).
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Lloyds Banking Group (LON:LLOY) plc (NYSE:LYG) carries a Zacks Rank of 1. Its earnings estimates for 2018 have been revised 4.2% upward over the last 60 days. Also, its shares have gained 21% in the past year.
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