A protester wearing a jacket with an inscription reading ‘Performance which creates suffering’ stands in front of Deutsche Bank headquarters in Frankfurt. The bank said it was reducing its workforce by 15,000 as new chief executive John Cryan seeks to improve returns at Germany’s biggest bank.

Reuters/Frankfurt

Deutsche Bank is slashing 15,000 jobs and shedding assets in which some 20,000 staff are employed, as new chief executive John Cryan starts to implement a deep overhaul aiming to improve returns at Germany’s biggest bank.
Cryan said the bank will sacrifice its 2015 and 2016 dividends as it seeks to bolster its finances and retain money to pay for sins of the past. “I do not think that 2016 and 2017 will be strong years,” he told reporters yesterday.
Shares in the bank were down 6% at 25.815 euros by 0850 GMT. “We still believe there are major risks here and therefore think a capital increase in 2016 is still highly probable,” Citi analysts said in a note.
A trader said: “Investors are very disappointed. Two years of no dividends and CEO Cryan cautions 2016 and 2017 won’t be strong in terms of business either. That’s a long time and shareholders are wondering why they should stay invested.”  Cryan is under pressure to overhaul Germany’s biggest bank, with costly litigation from past scandals and fallout from a market rout in Asia pushing its valuation well below rivals.
“Deutsche Bank does not have a strategy problem. We know exactly where we want to go. But we have had a grave problem in implementing it,” Cryan said, addressing reporters in German, in contrast to his predecessor Anshu Jain who regularly drew criticism for never mastering the language.
Cryan said staff will feel the pain. “I have said that it would not be all sweetness and light,” he said, adding it would be unacceptable not to share some of the cost of the settlement of interest-rate rigging and consequences of poor past behaviour.
In the context of the group making a 2015 loss, its supervisory board will discuss if it will be appropriate for the board to pay bonuses, he said.
Co-CEO Juergen Fitschen acknowledged the bank has not yet done enough in changing its behavioural culture. “Cultural change ... it needs to be filled with content. What we have brought about is only the beginning,” Fitschen said.  The lender is to axe 9,000 full-time jobs and 6,000 external contractor positions. Three quarters of the other 20,000 jobs to go are at retail unit Postbank, which Deutsche Bank is spinning off.  “We were concerned that our shareholders thought cost-cut goals were not ambitious enough. We think they are realistic based on the need to remain competitive,” Cryan said.
“We think we should retain capital in order to strengthen the company. Because we have to run business on the basis that we could encounter stress. We need to build a buffer above the minimum.”
Deutsche Bank said late the previous day it was targeting a reduction of its risk-weighted assets to about €320bn ($349bn) by end-2018 from €416bn at the end of June, towards the top end of analysts’ expectations.
“The plan is based on the elimination of the Deutsche Bank common share dividend for the fiscal years 2015 and 2016,” it said in a statement, adding it aimed to resume paying dividends thereafter.  Ever since its post-World War Two reestablishment in 1952, Deutsche Bank has always paid a dividend.
Earlier this month, the lender announced it would split its investment bank in two and part ways with three of its eight management board members.
The bank also said it was aiming to bring down adjusted non-interest expenses to less than €22bn by 2018 from €23.8bn in 2014, and to reduce its cost/income ratio to 70% in 2018 from 84.3% at the end of June.