Deutsche Bank has started 2023 as well as it did ten years ago. Germany's largest bank increased its net profit in the first quarter of 2023 by 8 percent year-on-year to 1.3 billion euros. On the stock exchange, the share price changed in the first few hours of trading

Hanno Mußler

Editor in business.

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Nevertheless, the Management Board raised the cost-cutting target. The cost base is to be reduced by 2.2 billion euros by 5 instead of 2025 billion euros. This is to be achieved through "strict hiring restrictions in areas far from customers", "targeted job cuts at management levels", the streamlining of the mortgage lending business and the further downsizing of the technology center in Russia, as Deutsche Bank announced on Thursday morning. In a subsequent conference call with journalists, CEO Christian Sewing and his deputy, CFO James von Moltke, specified the cuts: 5 percent of executives, which would correspond to about 800 people, could be saved. Previous investments in automation now allowed for a leaner organization and efficiency gains.

Focus on insoles

Journalists and analysts were particularly interested in the impact of the turbulence in the banking sector caused by the collapsed US regional institutions Silicon Valley Bank and Singature. The 4 percent quarter-on-quarter decline in deposits at Deutsche Bank is due to increased competition following the rise in interest rates, von Moltke stressed. Even before the turbulence, investors had shifted savings from low-interest accounts to higher-yielding money market funds, most of which had flowed into in-house funds and thus remained in the bank.

When Credit Suisse got into trouble and was bailed out by its larger Swiss rival UBS in the first quarter due to high cash outflows of around 70 billion euros, there were also speculative attacks on Deutsche Bank, the two Deutsche Bank board members admitted. As reported, premiums for credit default swaps had risen significantly. Deutsche Bank, however, has proven to be a safe haven, Sewing said. Their deposit base, especially in Germany, is extremely stable. In April, stability returned to the entire banking sector, said von Motlke. He assumes that Deutsche Bank will soon exceed the 600 billion euros in deposits again.

When asked by the F.A.Z. whether the austerity program outlined on Thursday would have existed even without the speculative attacks on Deutsche Bank in March, Sewing replied with a resounding "yes." Both are to be seen completely independently of each other. The target of a 10 percent return on equity is not enough. The profitability path must be accelerated if Deutsche Bank is to achieve its long-term goal of market leadership in Europe. The Management Board also wants to drive up the share price by buying back its own shares. So far, the supervisory authority has been cautious, but von Motke was confident that he would be able to start a share buyback program from the second half of the year.

Executive Board to be reduced in size

The austerity course does not stop at the board of directors. The top management body is shrinking from ten to nine members, as Germany's largest bank announced on Wednesday evening. For example, Christiana Riley, the member of the Board of Management responsible for America, will leave Deutsche Bank in May, as reported exclusively by the F.A.Z. in advance. Stefan Simon, Chief Legal Officer, will also take on her duties with the aim of improving relations with the US financial supervisory authority. Claudio de Sanctis will replace Karl von Rohr, who will leave the company at the end of October. Another beneficiary of von Rohr's resignation is Chief Financial Officer James von Motlke, who is now Sewing's sole deputy and will also be responsible for the fund business.