Deutsche CEO Wants Bank to Play a Leading Role in European Bank Consolidation – Report

Deutsche Bank CEO Christian Sewing has told Welt am Sonntag in an interview that he sees Deutsche playing an active role in a possible consolidation of the European financial industry, and “not just as a junior partner.”

Deutsche Bank (DB) recently posted strong third quarter earnings results that beat analyst expectations, and the CEO expects a complete transformation after years of under-performance by 2022.

Sewing said in the interview, “I am very proud that we are now working even more successfully here than we originally expected.”

According to Sewing, every successful quarter places the bank in a stronger position, which is important for both the bank and for Germany. He added that the importing of financial services would be a strategic mistake and emphasized the best way of paying off debts is to lay a strong foundation for future growth.

Deutsche Bank has navigated the COVID-19 crisis relatively well, in Sewing’s opinion, with demand for its corporate banking services growing. This has enabled the bank to compensate for lower interest rates and higher risk provisions. (See DB stock analysis on TipRanks)

Societe Generale analyst Andrew Lim reiterated his Buy rating on the stock last week and set a price target of $15.77. This implies upside potential of around 45% from current levels.

Following the release of Deutsche’s Q3 results, Lim noted that the group is finally repairing itself and is able to generate corporate investment banking (CIB) revenues while continuing with its cost reduction plans.

Consensus among analysts is a Moderate Sell based on 1 Buy, 6 Holds and 8 Sells. The average price target of $9.54 suggests downside potential of around 12% over the next 12 months.

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