Deutsche Bank sticks with 2022 profit target, to make deeper cost cuts

Deutsche Bank sticks with 2022 profit target, to make deeper cost cuts

2/2 © Reuters. FILE PHOTO: The logo of Deutsche Bank is pictured on a company's office in London © Reuters. FILE PHOTO: The logo of Deutsche Bank is pictured on a company's office in London 2/2

FRANKFURT (Reuters) – Deutsche Bank (DE:DBKGn) on Wednesday said it would cut costs further as the bank confirmed a key profitability target for 2022 that is higher than some analysts have forecast.

Germany's largest lender is in the midst of a major overhaul under Chief Executive Christian Sewing and has already announced plans to cut headcount by 18,000 and exit some businesses.

Deutsche Bank is aiming to return to profitability after five consecutive years of losses totalling more than 15 billion euros ($18.20 billion).

The bank said in a presentation to investors that it was still aiming for a return on tangible equity of 8% by 2022, a goal that it originally set out in its restructuring plans in 2019.

A consensus forecast published by Deutsche Bank, showed that analysts forecast a 3.3% return on tangible equity by 2022.

"Since 2018 we have consistently delivered on or ahead of our targets," Sewing said.

Deutsche also said it would cut costs to 16.7 billion euros by 2022, which compares with a previous target of reducing costs to 17 billion euros.

The bank forecast revenues of 24.4 billion euros by 2022, a more precise than a figure of around 24.5 billion that it had previously disclosed.

The bank now sees more revenue coming from its investment bank, with growth rising 3% for the period 2018 through 2022, up from previous expectations of 2%. At the same time, it scaled back revenue for its corporate bank.

Deutsche's investment bank, which has long been a drag on earnings, has benefited from market volatility which has boosted trading.

Many analysts now say that Sewing is making progress on turning the bank around. Last month, Moody's (NYSE:MCO) removed a negative outlook it had placed on the bank's credit rating, saying the bank had progressed to a firmer strategic footing.

($1 = 0.8243 euros)

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