By Eyk Henning
FRANKFURT-- Deutsche Bank AG plans to unveil in the spring the
results of a continuing strategy review, which could include the
sale of its Postbank retail unit, according to people familiar with
the matter and an internal document reviewed by The Wall Street
Journal.
The German lender's current three-year strategic plan, dubbed
2015+, expires this year and officials have said a strategic review
was planned.
In a memo sent to bank employees on Monday, co-Chief Executives
Anshu Jain and Jürgen Fitschen said they were "working diligently
on the next phase of our strategy" and would present an update "in
the second quarter." They gave no further details.
Deutsche Bank Monday also postponed its annual news conference
to the same day in the second quarter, but didn't provide a date.
The bank said it would still publish fourth-quarter and full-year
results as previously planned on Jan. 29.
The presentation of a new strategic plan will mark a major
junction for Messrs. Jain and Fitschen, who took control of
Germany's largest bank from Josef Ackermann in mid-2012. Both men
are under pressure to accelerate the bank's turnaround and improve
results because the lender's share price has been lagging behind
those of international rivals over the past year.
The current three-year strategy promised to cut costs and risks,
add stable sources of revenue and improve the bank's internal
culture. While the bank managed to cut balance-sheet risk and
strengthen its capital base, investors and analysts say it must
further improve profitability.
"We don't think Deutsche Bank will reach its ambitious financial
[profitability] targets," said Dirk Becker, analyst at Kepler
Cheuvreux, in a recent note.
In the first nine months of last year, Deutsche Bank recorded a
return on common equity of 2.8% after taxes, far short of its 12%
target for next year and below rivals' including J.P. Morgan Chase
& Co. and UBS AG, which posted 10% and 7.1% returns,
respectively.
Deutsche Bank in November moved to curb costs by designating its
chief financial officer, Stefan Krause, as its head of strategy
with responsibilities including cost cutting and other issues.
One option Mr. Krause's strategy department is now considering
is the sale of Postbank, according to a person briefed on the
review. Deutsche Bank started buying Postbank from German post
office Deutsche Post AG in 2008.
A Deutsche Bank spokesman said "speculations about the sale of
business units, including Postbank, are irresponsible" and the
lender is focused on executing its current strategy. News about a
potential sale of Postbank was first reported by Germany's Manager
Magazin in December.
Disposal of Postbank would be a significant strategic shift for
Deutsche Bank, which had hoped the acquisition would bolster its
thin retail-banking network and round out its large operations in
investment banking, asset management and private banking. Deutsche
Bank had also hoped it could tap Postbank's retail deposits to
inexpensively fund its investment-banking operations, industry
experts and people familiar with the matter have said.
Those synergies haven't fully panned out because Germany's
banking watchdog, BaFin, has forbidden Deutsche Bank from tapping
Postbank's profits or using all of its deposits, people familiar
with the situation say.
These people say BaFin has wanted to ensure Postbank funds
wouldn't be endangered by potential investment-banking losses at
Deutsche Bank. A BaFin spokesman declined to comment on the matter.
A Deutsche Bank spokeswoman also declined to comment.
Since the financial crisis began in 2008, critics of the banking
industry have said investment-banking and retail-banking activities
should be kept separate. In the U.S., the Dodd-Frank
financial-services reform bill, which took effect in 2010, aims to
establish some separation.
In Europe, Deutsche Bank's rivals, including UniCredit SpA, have
been freer to move money internally. According to regulatory
filings, Italy's largest bank moved more than EUR11 billion ($13
billion) to Italy from its German unit, HVB, before BaFin in late
2011 ordered them to stop the internal transfers.
While Deutsche Bank's disposal of Postbank isn't a foregone
conclusion, the move would improve Deutsche's leverage ratios,
analysts and investors say.
In an interview last month, Deutsche Bank's Mr. Fitschen said
private-client activities--like Postbank--are essential for
Deutsche Bank, even though it is hard to boost profits. He said
"everything needs to meet the test of whether it is [economically
viable]. The business model must be in the interest of clients, but
also in the interest of our shareholders."
Other aspects of Mr. Krause's team's continuing review include
potential acquisitions to expand Deutsche Bank's Asset and Wealth
Management unit, which trails those of major U.S. and European
rivals in terms of assets under management.
Write to Eyk Henning at eyk.henning@wsj.com
Corrections & Amplifications
An earlier version of this article misstated UBS's return on
common equity for the first nine months of 2014.
Access Investor Kit for Deutsche Post AG
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=DE0005552004
Access Investor Kit for UniCredit SpA
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=IT0004781412
Access Investor Kit for Deutsche Post AG
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US25157Y2028
Access Investor Kit for JPMorgan Chase & Co.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US46625H1005
Subscribe to WSJ: http://online.wsj.com?mod=djnwires