Deutsche Bank AG is expediting the integration of Deutsche Postbank AG but does not plan to change the integration strategy amid a scurry to improve its profitability, the Financial Times reported May 15, citing Frank Strauß, who is the head of retail and commercial banking at Deutsche Bank.
The collapse of Deutsche's merger talks with fellow German lender Commerzbank AG has renewed pressure on its margins and raised questions on whether it can execute its long-term strategic turnaround.
Postbank's integration is "already ahead of schedule" and Deutsche is on track to complete the integration steps scheduled for 2019-end in the second and third quarter, Stephan Szukalski, a member of the lender's supervisory board, told the FT.
Strauß told the FT that Deutsche Bank will continue to reduce headcount in its head offices and has upped the timetable to within two years from the previous schedule of three years.
Deutsche Bank has also lifted its intermediate 2019 Postbank cost savings and extra revenues target to €300 million from a previous goal of €200 million — essentially realizing a third of the total €900 million in annual "synergies" it expects to create by 2022 as a result of the merger, people familiar with the matter told the FT.
"2019 will be the first year in which the annual cost synergies will exceed restructuring costs," Strauß told the newspaper without delving into the target numbers mentioned by the sources.
Strauß added that "the next steps will be to restructure the head offices and operations and IT," and that Deutsche Bank is intent on resolving restructuring details with unions by mid-2019.
Deutsche Bank took over Postbank in 2010 for €6.5 billion and merged it with its Deutsche Bank Privat- und Geschäftskunden AG business to create private and commercial banking unit DB Privat- und Firmenkundenbank AG in May 2018. However, it has yet to make a profit from it nine years on.