Deutsche Bank predicts meagre growth due to low rates

Frankfurt, Bayern, Germany Dec 10, 2019, 04.24 PM(IST)

The logo of Deutsche Bank is pictured on a company's office in London, Britain Photograph:( Reuters )

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The German bank said it expected revenue at its core banking business to grow by just 1% in the run-up to 2022, half the growth level estimated in July. It put emphasis instead on efforts to cut billions of euros in costs.

Deutsche Bank pared back its revenue growth target on Tuesday, blaming rock-bottom interest rates for hurting its business in a downbeat presentation to investors.

The German bank said it expected revenue at its core banking business to grow by just 1% in the run-up to 2022, half the growth level estimated in July. It put emphasis instead on efforts to cut billions of euros in costs.

Chief Executive Christian Sewing pointed to "significant progress" in recent months in turning around the bank in the presentation ahead of an investor day. But the bank highlighted the impact of low interest rates in the eurozone on its business.

Deutsche said such low rates would hurt its retail bank as well as corporate banking in the medium term, but it predicted that growth at its investment bank would partly make up for this.

The bank said it had taken steps to cope with low rates, including lending more and "selectively" passing on to customers the costs it faces for keeping cash at the central bank.

Deutsche Bank also said that the European Central Bank had reduced the lender's capital ratio requirement, following a review.