It's up to us, ”said the Deutsche Bank CEO when asked what the biggest risks for the bank could possibly be.
Christian Sewing should know.
He made a career in the bank as a risk manager and made it to the top of the largest German bank in 2018.
"It's entirely up to us," said Sewing, to continue working with discipline and stability to ensure that the bank makes it from the downward to the upward spiral in the long term.
Sewing knows what he's talking about. He has been with the bank for decades and has witnessed its rise and fall. Deutsche Bank was in the process of gambling away what is still the core capital of banks today: the trust of its customers. Excess bonuses and fraud scandals have given the financial industry and above all Deutsche Bank an immense credibility problem. Little by little, Sewing and his team fought back. The numbers now shown are an expression of this.
In banking, size is a value in itself, but when parts become independent, as investment banking once did, the business becomes confusing. Investment banker teams in the marketplaces around the world have little to do with announcements from a Frankfurt headquarters. Customers look for alternatives and leave. That's why Sewing was right in concentrating only on business areas that can be managed and in which the bank can work successfully. The classic Wild West investment banking of the 1980s and 1990s was passé.
Investment banking, however, in which German companies are supported in their activities abroad, for example in the bond and currency business, is very worthwhile. The success of this division speaks for itself and arouses desire. Wouldn't it make sense to expand these lucrative activities and take profits? Risk manager Sewing hits the brakes. Repeating old mistakes and sacrificing slower but sustained growth for quick success would be foolish.
And yet Sewing must not hesitate now. He needs a strategy that goes beyond 2022. What will Deutsche Bank stand for when the restructuring is complete? The earnings potential that arises for financial institutes when it comes to sustainability is gigantic. However, with the greenwashing allegations against the Deutsche Bank subsidiary DWS, there is also a foretaste of the (reputational) risks that lie in the subject, where so much is still unclear and hard assessment approaches have so far been lacking.
Deutsche Bank is back.
In order to be able to play on the big international financial stage, a partner may be needed in the end to reach the critical mass again.
Until recently, there was no imagination to imagine the bank playing a strong role in the merger drama.
It is up to Deutsche Bank itself not to gamble away this confidence again.