Deutsche Bank to reach most new targets by 2018, JPMorgan says

Deutsche Bank AG will probably reach most of the targets set under its five-year plan by 2018, according to analysts at JPMorgan Chase & Co.

PHOTO: REUTERS

5 May5:59 PM

[BERLIN] Deutsche Bank AG will probably reach most of the targets set under its five-year plan by 2018, according to analysts at JPMorgan Chase & Co.

JPMorgan expects Deutsche Bank to reach its return on tangible equity and leverage reduction targets by the end of 2018, analysts led by Kian Abouhossein said in a research note after they met with Deutsche Bank Co-Chief Executive Officer Anshu Jain. The analysts didn't specify when the meeting took place.

Concerning its goal of achieving 3.5 billion euros in annual gross savings, the bank needs to provide further details on its cost-cutting plans to convince the market, the analysts said in the note Tuesday.

"We believe most of the targets will be achieved by year- end 2018 except the five percent leverage ratio," according to the note, which reaffirmed the analysts' overweight rating. "In respect to cost savings, we believe management has a clear roadmap that will be outlined within three months." Co-Chief Executive Officers Juergen Fitschen and Anshu Jain outlined new targets along with a strategic reorientation last week, the biggest revamp at the bank since they took charge three years ago. Deutsche Bank shares have posted the worst performance among global peers during their tenure and by the market's close on Monday had dropped 4.4 per cent since April 27, the day the bank announced details of the strategy.

"The market remains skeptical on cost savings as we see little evidence of net cost decline from the ongoing 4.5 billion-euro cost-savings program," the analysts wrote.

The CEOs aim to achieve a return on tangible equity of at least 10 per cent in the medium term from 3.9 per cent in the first quarter, scrapping the previous profitability goal for at least 12 per cent return on equity in 2016.

The strategy includes efforts to deleverage the investment bank and the sale of the consumer unit Postbank in a stock offer.

BLOOMBERG

    
 

Fed cooperating with probe on leak: Yellen  

US Federal Reserve chairwoman Janet Yellen on Monday said the central bank was cooperating with authorities over the alleged leak of confidential information in 2012 ahead of a crucial meeting of the bank's monetary policy panel. 

PHOTO: AFP

5 May5:35 PM

[NEW YORK] US Federal Reserve chairwoman Janet Yellen on Monday said the central bank was cooperating with authorities over the alleged leak of confidential information in 2012 ahead of a crucial meeting of the bank's monetary policy panel.

The Justice Department is probing what it suspects were organized leaks, carried out before an important monetary policy decision by the Federal Open Market Committee (FOMC) in October of that year, Yellen said in a letter to lawmakers.

Medley Global Advisory, a Financial Times unit that sells analyses to investors, on October 3, 2012 published confidential information on a meeting of the Fed's monetary policy committee held in September.

During that meeting the Fed said it would launch a major programme of buying assets to stimulate US economic growth.

In the letter Monday, Ms Yellen said she met with Regina Schleiger, an official of Medley Global Advisors, on June 11, 2012 to hear her views on international economic policy, but made clear she did not reveal sensitive information.

"Nothing Medley Global Advisors reported in October about the events of the September 2012 FOMC meeting could have been conveyed in June and let me assure you that, in any case, I did not convey any confidential information," Ms Yellen said in the letter.

At the time - June-October of 2012 - Ms Yellen was the number-two official at the Fed.

The US central bank is cooperating fully with the Justice Department, she told lawmakers, who are seeking the names of staffers who are the target of the internal investigation.

She asked US lawmakers not to release the names of the staffers or information that is going to be passed on to them, at least until the internal probe is completed.

AFP