Deutsche Bank’s (DB) CEO John Cryan Interview

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https://global.handelsblatt.com/edition/505/ressort/finance/article/deutsche-bank-ceo-dampens-merger-talk

The plan is to make the bank smaller

“…part of our work that we are doing is to make our bank a bit smaller in order to make it a bit simpler, because we want to set higher standards for control and we also want to be more successful.”

…as they divest in certain areas

“…some days ago, we sold a bank in Argentina. There are a lot of pieces of the Deutsche Bank Group that no longer make sense in the context of the Deutsche Bank today, including Deutsche Postbank.”

The customer customer has final say on where they will locate their businesses after the Brexit

“I think it is important for the bank to respect that we really need to follow our customers. And in some of our trading areas, London is our biggest trading hub. We trade a lot of papers and derivatives in the Eurozone or in European Union paper. And although we are passported into the U.K. – and U.K. authorities are very keen that we continue passporting – our clients might take us back into the Eurozone or into the European Union because they may demand that we transact with them with a European Union entity.”

There is a chance that Brexit may not be implemented

“I would never say 100 percent, but it is very likely. I think the sense in the government at this moment is that it is marginally the will of the people (to leave the European Union), which we should try to execute in the best way possible.”

The impact of negative interest rates on banks varies with the size of the bank

“If you take a big bank like Deutsche Bank, you have the ability to withstand negative interest rates much longer as we have a diversified business with asset management fees, transaction fees, trading businesses. And they are less affected or not affected. But our core banking business is. And at these margins with deposits, you will make losses. Because the money is parked at the central bank, you can’t use it elsewhere. For a simpler, more monoline bank that is taking deposits and lending it to clients, mortgages or consumer finance, it is more difficult. They have to charge more on the asset side for lending. Because you can’t really charge retail customers a fee or much of a fee for making deposits.”

Would they pass the negative rates to customers?

“…I think banks will have to absorb that cost for taking deposits and try making up for some of the costs in charging a little bit more for lending. And that is the reason why I think the transmission mechanism with negative interest rates isn’t working.”