New Deutsche Boss Has Simple Strategy

Josef Ackermann, a former chief executive at the Credit Suisse Group, formally takes over as chief executive of Deutsche Bank this week. He has a big job on his hands.

The bank's profit margins are amongst the lowest in Europe and its costs are up there with the highest in the banking industry. Its market capitalisation is roughly one sixth the size of rival Citigroup and the bank is thought to be determined to avoid being taken over by the US banking giant.

Ackermann plans to work hard to raise Deutsche's stock price and realises that he needs to act quickly. A larger market capitalization is essential if the bank is to make further acquisitions. It is also necessary as a defensive measure to avoid takeover.

Ackermann's strategy is a simple one. He will attempt to concentrate power into his own hands and avoid the concensus-driven management style that has frustrated many senior Deutsche staff in the past. He will continue to ensure that costs are cut and he will accelerate the sale of the bank's industrial holdings, using the proceeds to buy back up to 20% of the bank.

The pressure is on, but Ackermann is thought to be up to the difficult task at hand. Only time, however, will tell.

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