Deutsche Bank sees 2017 revenue 'Broadly Flat' compared to 2016

Deutsche Bank published its annual report and said it expects revenues to remain "broadly flat compared to 2016. However, excluding already completed as well as anticipated disposals and the impact of NCOU in 2016, we expect revenues to grow, driven by a better operating environment for Deutsche Bank and an improved macroeconomic outlook.

The outlook reflects the expected modest economic recovery in Europe, while growth in the Americas is expected to benefit from fiscal stimulus, as well as the positive impact of an improving interest rate environment. We expect a meaningful client activity pick-up in 2017,of which we have already seen evidence in the beginning of this year, and we intend to further continue to simplify our structures and make processes more efficient."

Deutsche Bank also commented, "We are committed to work towards our target of 10 % Post-tax Return on Average Tangible Equity, assuming a normalized revenue environment and on the basis of the achievement of our cost targets. The measures currently under- way, and planned for implementation in 2017 and the following years, are key elements for reaching that target. However, given the continued burden, mainly from litigation and restructuring costs, we currently expect only a moderate improvement of our Post-tax Return on Average Tangible Equity in 2017.

As part of the Group-wide cost reduction program, we plan to implement our branch network optimization, deliver efficiencies through digitalization of processes and streamline the COO and infrastructure functions to reduce headcount and cost. In parallel, we plan to continue our investment s in strengthening the control functions and the supporting infrastructure environment. We are targeting approximately EUR$22 billion in adjusted costs in 2018, which includes Postbanks adjusted costs, and expect a further reduction to approximately EUR21 billion by 2021. In 2017, we expect to see net cost reductions flow through from investments made last year, as well as from the impact of expected headcount reductions, and the successful completion of our NCOU disposals."

Looking forward, "we expect the planned sale of a minority stake in Deutsche Asset Management via an IPO over the next 24 months, and the disposal of other businesses, to generate, through risk weighted assets reduction and capital impacts, an equivalent of up to EUR2.0 billion in capital. In the financial year 2017, we expect increases in RWA, notably from operational risk, methodology changes and selected business growth. By yearend 2017, we expect our fully loaded CET 1 ratio to be approximately 13 % and our fully loaded CRR/CRD 4 Leverage Ratio to be approximately 4 %."