Give Deutsche Bank AG CEO More Time, Fund Manager Serra Says at Davos
January 23 2018 - 5:52AM
Dow Jones News
By Jenny Strasburg
DAVOS, Switzerland--Deutsche Bank AG and its Chief Executive
Officer John Cryan need another two to three years to show the
progress promised as part of the German lender's long-term
turnaround, said Davide Serra, who runs London-based fund manager
Algebris Investments, at the World Economic Forum in Davos,
Switzerland.
It's unrealistic to expect Mr. Cryan to have reoriented Deutsche
Bank after years of high-leverage trading strategies that aren't
possible or don't pay off the way they used to, particularly in
low-volatility, low-interest-rate markets, said Mr. Serra, whose
firm oversees about $14 billion in assets and has invested in
Deutsche Bank so-called AT1 securities.
With rising interest rates, Deutsche Bank could make 6% to 7%
return on equity in its core businesses within two to three years,
Mr. Serra said. That prospect hasn't yet been factored into
investor expectations, but the bank is making the right moves to
achieve that return and eventually cover its cost of capital, he
said.
Write to Jenny Strasburg at jenny.strasburg@wsj.com
(END) Dow Jones Newswires
January 23, 2018 05:37 ET (10:37 GMT)
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