FRANKFURT – Deutsche Bank is aiming for higher annual revenue and a lower cost-to-income ratio by 2025, Germany’s largest lender said on Thursday as it mapped out its financial plans for the coming years.
The bank said it would strive for a post-tax return on tangible equity (ROTE) – a key profit metric – of more than 10% by 2025.
The more ambitious goal comes as many investors still doubt whether Deutsche will achieve this year’s target of 8%, which the bank is firmly standing by, though it acknowledged increased uncertainty due to the war in Ukraine.
The new roadmap is the first since the bank embarked on a major overhaul in 2019, which involved exiting some businesses and cutting thousands of jobs after years of losses.
Under Chief Executive Officer Christian Sewing, Deutsche has made progress, delivering its most profitable year in a decade last year.
But analysts’ consensus is for the bank to achieve a ROTE of just 6% this year.
“For the full year 2022, we continue to expect to deliver a post-tax return on tangible equity of 8%,” said Chief Financial Officer James von Moltke.
Deutsche is also aiming for a cost-to-income ratio of below 62.5% for 2025. That compares with 2021’s ratio of 84.6% and the bank’s target of 70% this year.
The bank said it would raise revenue to around 30 billion euros ($33.13 billion) by 2025, from a target of 25.4 billion euros this year.
($1 = 0.9056 euros)