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“Today we would be more critical”

A few days before the interview with Karl von Rohr, Deutsche Bank presented its best result for 15 years.

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“Today we would be more critical”

A few days before the interview with Karl von Rohr, Deutsche Bank presented its best result for 15 years. The private customer business, which the vice president represents on the board, has also increased. Nevertheless, it has been said for weeks that his contract may not be extended. What does he say to that?

WELT AM SONNTAG: Mr. von Rohr, many customers have complained about problems in the online banking of your Postbank subsidiary. what went wrong

Karl von Rohr: At the turn of the year, we transferred 2.2 million customers from Postbank's systems to those of Deutsche Bank. At the same time, we have made large parts of our infrastructure future-proof, brought securities processing back into our house and introduced new online and mobile banking. After that, more than 4,000 customers complained. We are really sorry for the inconvenience. But given the scale of the project, it's still a success. However, as we continue to integrate, we will improve our communication with customers across all channels. It wasn't ideal yet.

WELT AM SONNTAG: You want to transfer the remaining customer data in the first half of the year. Is the schedule set?

Karl von Rohr: The schedule is set. The next wave of migration will follow as planned at the end of March, and we have planned the last for the middle of the year.

WELT AM SONNTAG: When exactly?

Karl von Rohr: We don't give a specific date, but we are determined to complete the migration in mid-2023. This is where care comes before speed.

WELT AM SONNTAG: When you're done with the integration, there will be two brands with two store networks. Does this make sense?

Karl von Rohr: We continue to believe in the two-brand strategy because Deutsche Bank and Postbank address different customer groups. Apart from sales, we have very consistently brought both banks together. From 2025, we will achieve synergies of EUR 300 million per year through the joint IT.

WELT AM SONNTAG: Deutsche Bank currently has around 400 branches, Postbank around 620. How many will you close in the coming years?

Karl von Rohr: A branch bank with advice is and remains a sensible offer. However, customer behavior has changed significantly and will continue to change. Offers are increasingly being processed digitally, advice is less location-dependent. Our network will therefore certainly look different in a few years than it does today.

WELT AM SONNTAG: A contract with Deutsche Post that obliges you to operate branches will expire in 2025. If you cancel that, you could convert Postbank into a purely digital brand.

Karl von Rohr: In the past we have always had constructive discussions with Deutsche Post about the further development of our cooperation. We will continue to do so.

WELT AM SONNTAG: Do you rule out an end to the cooperation?

Karl von Rohr: Once again: We will decide on the subject with Deutsche Post in due course. There is nothing more to say at the moment.

WELT AM SONNTAG: How important is the branch?

Karl von Rohr: We want everyone to find something that suits them. This can be purely digital, supplemented with video and chat functions, via regional advice centers or personally in the branch. This flexibility also includes new branch formats. As a test, we have the Deutsche Bank and Postbank brands in one location, but in separate rooms. That worked well and we want to expand on that. After integrating the IT, we could also look after customers of the other brand in the branch of one brand.

WELT AM SONNTAG: You also announced a new digital offer. Is there really a need for this?

Karl von Rohr: We are targeting customers with long-term investment needs who would rather be with an established bank than with a fintech. Our offer will be digital and will enable easy access to competent advice if required. From our point of view, there is nothing comparable in Germany so far. Regular surveys with potential customers show that there is a need.

WELT AM SONNTAG: What's the status?

Karl von Rohr: We are currently working on the test version. We want to start the offer in the first half of 2024.

WELT AM SONNTAG: Deutsche Bank has repeatedly launched digital offerings under names such as Maxblue, Norisbank, Fyrst and Yunar. Nothing really worked. Why should it be better now?

Karl von Rohr: Most of these brands still exist and are successful. We have recently concentrated fully on the restructuring and digitization of our core processes. We have increased our speed and can now focus more intensively on how we can better meet the daily needs of our customers. Focusing also means that we consistently end projects that don't get us any further.

WELT AM SONNTAG: The major US bank J.P. Morgan is working on a digital offering for the German market. Does that worry you?

Karl von Rohr: No. With the right mix of efficiency, digitization and advice, we will continue to be successful in the future. The private customer bank achieved a record result in 2022 and is in better shape than ever. Our return on equity was negative in 2019 and 10.6 percent in 2022. The turnaround is complete, now it's about growing and improving efficiency.

WELT AM SONNTAG: The results also come from the fact that you are charging higher interest rates for loans again, but hardly pay any for deposits. When does the effect wear off?

Karl von Rohr: We have already followed suit and offer, for example, two percent interest for twelve months of fixed-term deposits. Nevertheless, the higher interest rates will continue to have a positive impact on our business in the coming years. The greatest effect will not be felt until 2025.

WELT AM SONNTAG: Due to rising interest rates and construction costs, the demand for real estate loans has collapsed. How does that affect you?

Karl von Rohr: Of course we feel that too. We expect business to come back if prices continue to fall. However, it will probably not reach the level of the past few years again.

WELT AM SONNTAG: Do you expect more loan defaults?

Karl von Rohr: We are currently not worried about this topic, neither in the case of real estate nor consumer loans. We set reasonable standards and adjusted them slightly again two years ago.

WELT AM SONNTAG: If inflation remains high, your customers will also run out of money.

Karl von Rohr: We are already noticing that the balances on current accounts are falling, especially for less affluent customers. Of course, this influences the demand for credit and investment behavior. Luckily, the latest forecasts assume that inflation will fall.

WELT AM SONNTAG: You are also the head of the supervisory board of DWS, the investment company of Deutsche Bank. It is a long way from the declared goal of becoming one of the top ten addresses worldwide. Why is that?

Karl von Rohr: Despite adverse market developments, DWS' earnings were almost at the record level of the previous year. It has also developed well in comparison to the competition. We have no doubt that it will continue to grow successfully.

WELT AM SONNTAG: Deutsche Bank currently holds an 80 percent stake in DWS. Would it make sense to reduce the proportion?

Karl von Rohr: Mind games are always allowed, but there is nothing to announce in this regard.

WELT AM SONNTAG: DWS attracted more attention than its results with allegations that it presented its offer more sustainably than it was. Does that weigh on business?

Karl von Rohr: Of course that has a certain influence. But we were able to explain to our customers what it's all about, and I think they can understand that too.

WELT AM SONNTAG: Supervisory authorities in the USA and Germany as well as the public prosecutor's office are currently investigating, and an internal investigation is running at the same time. How is the situation?

Karl von Rohr: We will only comment on the details after the procedures have been completed in consultation with the authorities.

WELT AM SONNTAG: DWS boss Stefan Hoops recently stated that penalties are realistic.

Karl von Rohr: Penalties can never be ruled out in such proceedings. Anything else would be speculation at the moment.

WELT AM SONNTAG: Did you make any mistakes in clarifying the events?

Karl von Rohr: Of course we followed up on the information that was available to us. We are now further completing our internal independent investigations. I am convinced that these were carried out with care.

WELT AM SONNTAG: Shouldn't you have been suspicious when the proportion of sustainable investments suddenly increased enormously?

Karl von Rohr: DWS has repeatedly stated that it stands by all of the information reported.

WELT AM SONNTAG: Was it appropriate to interpret the term sustainability as broadly as possible for marketing reasons?

Karl von Rohr: It is very difficult to define what is "appropriate". All the more so since there was no clear regulatory definition of sustainability until not so long ago. With today's knowledge, one would certainly look at some statements more critically.

WELT AM SONNTAG: Why did you extend the contract of the then DWS boss Asoka Wöhrmann after a whistleblower, i.e. a whistleblower, drew attention to possible manipulations?

Karl von Rohr: The decision was made well in advance. Only the signature was missing.

WELT AM SONNTAG: You could have suspended them.

Karl von Rohr: We took a very critical look at the time and had to decide what the right course of action was. It did not seem appropriate to us to create months of uncertainty about the leadership when the outcome of the investigations was completely open at the time. And we were aware that we could withhold or reclaim compensation components in the event of misconduct.

WELT AM SONNTAG: Your contract expires in October, the extension has so far been considered uncertain, also because of your role in the DWS affair.

Karl von Rohr: The Supervisory Board of Deutsche Bank usually decides on contract extensions six months before they expire. Before that, there are talks about it.

WELT AM SONNTAG: Do you want to continue?

Karl von Rohr: I'll discuss that first with my wife and with the supervisory board (smiles).

About the person: The 57-year-old lawyer Karl von Rohr became number two at Deutsche Bank in April 2018 when his colleague Christian Sewing took over the top position. On the Management Board, he represents business with private customers and asset management. The manager has been with the bank since 1997.

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