Deutsche Bank Chief Executive John Cryan says the bank’s new plans to merge Postbank into its operations will likely lead to further job reductions in Germany.
In an interview with Handelsblatt, Mr. Cryan said the merger would lead jobs to be cut in some areas and added in others. On balance, he acknowledged, there would likely be more cuts than additions.
“The integration will cost jobs and probably more than the number of new jobs we can create. However, we see our primary job as helping the bank to grow once again,” Mr. Cryan said.
Postbank would also likely need fewer branches in the future as its clients “have started using digital products and services much faster than expected,” he said.
Mr. Cryan for the first time also suggested he was open to renewing his own contract as chief executive, which will end in 2020, if the bank has reached its own growth targets by then.
“It’s possible. If we succeed in achieving attractive returns and establishing a highly successful bank, why not?” he said.
Mr. Cryan, who has been in the job since July 2015, earlier this month announced a new strategic overhaul that includes reversing a previous plan to sell Postbank or take it public and another €8-billion capital increase. A full detailed plan on how Postbank and Deutsche Bank’s own private banking operations will be fully integrated is expected by the end of this year.
The bank’s shares fell on the plan reversal as Germany’s largest bank has been struggling to convince investors over the past year that, after two years of massive losses, it has what it takes to turn its fortunes around.
Sources say that major shareholders were taken aback by the strategic overhaul in advance. Only the bank’s chief shareholder from Qatar was warned of the plans in advance to test the waters for a further capital increase.
Mr. Cryan has vowed to create a new corporate culture within the bank that will return it to sustainable profits. The new plan has been dubbed project “Oak Tree,” the concept being that the bank has its roots in Germany but branches spread across the globe. That marks a departure from the bank’s more Wall Street-based mentality of the past few decades.
As part of that cultural shift, Mr. Cryan and his top executives passed on a bonus in 2016 as the bank booked another €1.9-billion loss for the year. In the interview, Mr. Cryan warned the bank would have to pay bonuses again in future if it hoped to remain competitive with its rivals.
Mr. Cryan also urged non-executive supervisory boards across Germany to take a more active role together in holding down bonus payments to company executives. He warned that something of an arms race has developed as supervisors want their own company’s executives to be in the top 25 percent to ensure they can hire the best managers.
Read the full interview on Handelsblatt Global.
Sven Afhüppe is Handelsblatt’s editor in chief. Daniel Schäfer is Handelsblatt’s finance editor and Michael Maisch deputy finance editor. To contact the authors: firstname.lastname@example.org, email@example.com and firstname.lastname@example.org