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Deutsche 'on target', CA dividend hike

Thursday, March 20, 2014 - 02:10

Mar. 20 - With 2014 deemed a 'make or break' year for Deutsche, Germany's largest banks says it's on track to meet targets despite a slow start. And Credit Agricole pledges a 50% dividend payout ratio as it aims for a huge increase in net profits. David Pollard reports.

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This is seen as a make or break year for Deutsche Bank - with sweeping plans to cut costs, slash balance sheets and resolve a long list of scandals. But, says Germany's largest bank, it's on track to meet its investment banking targets for next year - even if in the meantime, it's restating last year's results. 2013 will now include around 350 million euros of settlement costs and an extra 50 million to cover impaired assets. And, controversially perhaps, it's disclosing that co-chief exec Anshu Jain's compensation package jumped by over half to nine million euros. For Deutsche's other co-chief exec, Juergen Fitschen, it rose by around the same amount to eight million, although the bank's total wage bill fell slightly overall. Litigation reserves - for legal settlements which helped push Deutsche deep into the red last year - declined to 1.8 billion euros. In France, Credit Agricole is stepping up its cost-cutting. Chief Exec Jean-Paul Chifflet says it's identified a further 850 million euros of revenue synergies. It wants to trim over half a billion euros over the next three years to boost returns - and is targeting a 60 percent lift in its net profit to over four billion euros in 2016. Credit Agricole is France's third-largest bank - the latest statement signalling its intent to turn itself around, according to Reuters Breakingviews' George Hay. SOUNDBITE (English) GEORGE HAY, REUTERS BREAKINGVIEWS COLUMNIST, SAYING: ''Their strategy pre-crisis was effectively to just really go careening into the faster-growing, at that time, peripheral economies. And they ended up taking stakes and buying banks in Italy and Spain and most notoriously Greece. And as soon as the music stopped, they were in all sorts of trouble, they lost a lot of money withdrawing. What they're doing now is focussing on more conservative markets, obviously France, Italy as well, which hopefully should recover at some point.'' Investors, meanwhile, may well be tempted by a pledge to increase the dividend payout ratio. Credit Agricole is targetting fifty percent in 2015 - compared to 35 percent last year. /////////////

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Deutsche 'on target', CA dividend hike

Thursday, March 20, 2014 - 02:10