CashNews.co
LONDON (Reuters) -Germany’s struggling economy needs urgent action to boost its competitiveness, Deutsche Bank’s CEO said on Wednesday, calling for structural reforms, less regulation and lower taxes on companies.
“Germany needs to adjust its business model,” Christian Sewing told the FT Global Banking Summit in London. “It is urgent we take action,” he said, flagging the likelihood of further job losses in Germany’s auto industry and adding that February’s snap election would provide the opportunity for a reset.
The German economy has been dogged by intensifying competition from abroad, weak demand and an industrial slowdown. To boot, a budget row brought down the country’s three-way coalition last month, leaving Europe’s largest economy in political limbo until a snap election on Feb. 23.
The OECD on Wednesday cut its forecast for German economic growth next year.
Sewing, who has headed Deutsche Bank since 2018, said the company would invest 2 billion euros per year to increase automation as it tries to keep a lid on costs.
Deutsche has seen its shares rally in 2024 after a run of quarterly profits and a rebound in its investment banking business.
But its stock remains below where it traded after the global financial crisis in 2008-2009, and the lender has flagged higher bad loan provisions as the domestic economy weakens.
Deutsche Bank’s rival Commerzbank has been at the centre of speculation about a return of long-dormant European banking consolidation after Italy’s UniCredit snapped up a stake.
Sewing said his lender was “staying out” of the Commerzbank-UniCredit situation and was focused solely on itself, given the bank had “only actually seen 60% to 65% of our potential”.
Banking consolidation in Europe was “a logical trend”, he said, but the lack of a European banking union remained a hindrance to dealmaking.
(Reporting by Tommy Reggiori WilkesEditing by Sinead Cruise and Christina Fincher)