Deutsche Bank to Continue Investing in Investment Banking and Retail Units Amid New Strategy

Deutsche Bank's next strategic update will continue to rely on growth in its investment bank, with a focus on hiring senior bankers to expand the business with German corporate clients. The bank's CEO, Christian Sewing, plans to boost the bank's profitability target and highlighted the retail unit as a growth area due to rising demand in Germany for investment products. The principal strategy has been working, but the firm needs to improve capital allocation across business units.

Deutsche Bank is set to unveil its next strategic update, with a continued emphasis on growth in its investment banking division and an increased focus on hiring senior bankers to expand business with German corporate clients. The bank's CEO, Christian Sewing, has outlined plans to boost profitability and highlighted the retail unit as a key growth area, driven by rising demand for investment products in Germany.

Sewing's strategy, known as the Global Hausbank approach, aims to position Deutsche Bank as a leading financial institution globally while maintaining a strong presence in Europe. The CEO has emphasized the need to improve capital allocation across business units, stating that while the principal strategy has been effective, there is room for enhancement [2].

The bank's profitability target, currently set at a return on tangible equity of 10%, is described as an interim goal. Sewing expects that the elevated bond yields, driven by political uncertainty and rising global indebtedness, will persist, but he does not anticipate significant market disruptions [3]. This outlook aligns with the broader economic backdrop, where growth is forecast to be modest in 2025, with the U.S. projected at 2.0% and the Eurozone at 0.9% [1].

In the retail unit, Deutsche Bank is leveraging the growing demand for investment products in Germany to drive growth. The CEO has identified this as a key area for expansion, noting that rising demand for such products presents a significant opportunity for the bank. Additionally, Sewing has highlighted the importance of improving capital allocation, stating that the bank needs to do a better job in this area to ensure sustainable growth [2].

The upcoming strategic update, scheduled for November 17, is expected to provide further details on Deutsche Bank's plans for the years ahead. The bank will continue to focus on its core strengths, including its investment banking division and its retail unit, while also addressing the need to improve capital allocation across business units. As Sewing has emphasized, staying the course in turbulent times will be essential for the bank's success in 2025 and beyond.

References:
[1] https://www.deutschewealth.com/en/insights/investing-insights/economic-and-market-outlook/cio-annual-outlook-2025-deeply-invested-in-growth.html
[2] https://www.globalbankingandfinance.com/GERMANY-BANKS-DEUTSCHEBANK-CEO-5889ddd1-e3e9-4399-91c2-a65532149dd4
[3] https://www.ainvest.com/news/deutsche-bank-ceo-christian-sewing-warns-elevated-bond-yields-persist-political-uncertainty-2509/