The German lender is chopping up to 17 pct of investment banking assets. That sounds hefty, but pales next to a 53 pct shrinkage at Barclays. Partly out of necessity, Deutsche is still betting that fixed income will rebound. The first quarter had as much evidence against as for.
Ferdinand Piech’s exit gives Volkswagen room to rethink. Europe’s largest carmaker can ditch the former chairman’s more grandiose growth visions. It can create ample additional value by shunning M&A and focussing on existing strengths, cost control and cash generation.
Exiting Postbank, and cutting 200 bln euros of investment bank assets and 3.5 bln euros of costs, is what the German lender needs. A 5 pct leverage ratio goal is also higher than expected, raising the bar for European rivals. But it means investors face a wait for decent returns.
The chance of Britain quitting the EU will depend on the outcome of next month’s general election. But the question is unlikely to be simple given the probable involvement of the SNP or the Lib Dems in supporting a government led by either Labour or the Conservatives.
The Greek finance minister is learning that politics requires different skills from graduate school and media success. Some economists, from Imperial Russia to modern Indonesia, have done brilliantly, but Yanis Varoufakis could help write a book on what a doctorate isn’t good for.
The once-cautious French group is bidding $4 bln for private equity-backed IGATE. The friendly deal is at a pricey 22 times 2015 earnings. Still, the boldness could pay off. The IT services giant gets a faster-growing, higher-margin business, heft stateside, and tax benefits too.
The chairman’s resignation ends a worrying spate of boardroom conflict at Volkswagen. But there is a risk. Europe’s biggest carmaker may struggle without Ferdinand Piech’s tough love. Revamping its unwieldy and outdated governance structure can keep the group on the road.