Deutsche Postbank AG intends to consolidate its position as a leading retail bank in Germany on a long-term basis with an extensive package of measures. At the same time, in the medium term, it intends to ensure that it reaches its target of an operating return on equity after taxes of around 13% in a changed market and competitive environment after the crisis-related negative impacts have subsided.
With the “Postbank4Future” program, Postbank is sharpening its profile on the customer and product side, primarily by rigorously simplifying the product range, focusing on sales and expanding its service. The further reduction in complexity associated with optimization of products, services and sales will be accompanied by more streamlined processes and further tangible improvements in efficiency.
Despite the planned growth in volume, Postbank expects this to result in savings in administrative expenses of approximately EUR145m or around 5% compared with the level of 2008. These savings are to be generated in full by 2012. To achieve this target, property, plant and equipment costs will be reduced, and the efficiency-oriented measures will also lead to lower personnel costs. The resultant moderate job cuts of around 500 to 700 per year by the end of 2012 will be carried out in line with social criteria and predominantly by utilizing natural fluctuation.
In addition, the bank is continuing the reduction in capital market-oriented holdings, which was started in mid-2008. The aim is to significantly reduce the volume of these assets from the current level of EUR79 billion by the end of 2012. At the same time, the bank’s Tier I capital ratio is to be increased from the current 8% to around 10%, partly through the introduction of improved risk models and retention of profits, and the leverage ratio is to be reduced to below 30.
Stefan Jütte, chairman of the management board, said: “The overall strategy of Postbank with the retail, corporate banking, transaction banking and financial markets divisions remains the right one. However, our strategy must particularly take into account the changed context resulting from the financial markets crisis in our core business with retail banking clients.
“With our extensive program, we are making Postbank fit for the future. We are creating added value for our customers by fulfilling their requirements in terms of clarity, comprehensibility and attractiveness even more rigorously, thus conforming to the demand patterns changed by the financial requirements.
“In addition, we are creating added value for shareholders because we are making a major step towards our old earnings strength with this program. Consequently, we are also making jobs more secure in the long term at Postbank.”
