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Speaker 1: Christian Saving he's a Deutsche Bank chief executive officer. Christian,

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Speaker 1: as always, thank you so much for coming on. It's

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Speaker 1: a bit of a strange week because a lot of

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Speaker 1: the focus is on the of course atrocities, the human

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Speaker 1: loss of life between Israel and Hamas, but the focus

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Speaker 1: here is on growth, on whether we have more inflation.

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Speaker 1: So how did geopolitics going forward come into your thinking

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Speaker 1: of where the world is headed?

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Speaker 2: Go further? All? Thank you for having me. Look, I

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Speaker 2: think we are living in a time since the war

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Speaker 2: in the Ukraine, since the start of the war in

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Speaker 2: the Ukraine, where geopolitics have actually and are leading the economy.

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Speaker 2: So it's kind of exactly the other way around like

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Speaker 2: we used to know it from the last ten or

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Speaker 2: twenty years. And as a bank and as all participants

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Speaker 2: in the economy, you really need to watch out carefully.

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Speaker 2: I do believe that last week's events, the horrific events

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Speaker 2: which we have all seen, did not really have a

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Speaker 2: material impact yet on the economy. But this is exactly

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Speaker 2: the dangerous part because it only needs one or another

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Speaker 2: event and you see actually a huger or a bigger

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Speaker 2: impact on the markets. What does it mean we need

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Speaker 2: to say vigilant, we need to say diligent. I think

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Speaker 2: our clients really need the advice to risk manage their positions.

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Speaker 2: And that's where we are here and why we are

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Speaker 2: there for our clients. And that's actually the major discussions

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Speaker 2: here in Marrakesh. What is the potential downside? How do

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Speaker 2: we actually safeguard our clients? How do we risk manage

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Speaker 2: the positions?

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Speaker 1: Christian, we understand that certain banks have actually limited travel

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Speaker 1: for their employees in the Middle East. Are you going

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Speaker 1: to take similar steps?

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Speaker 2: No, not for the time being, because a I think

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Speaker 2: we have obviously done all the measures which we need

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Speaker 2: to do for our people in Israel. We are watching

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Speaker 2: the situation very carefully. On the other hand, I also

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Speaker 2: don't want to be now in a position where we

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Speaker 2: are simply issuing travel warnings across the region, because sometimes

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Speaker 2: I think that rhetorics and communication can make a situation

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Speaker 2: even worse, and that's what we should not do. We

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Speaker 2: should be balanced, we should watch it, we should risk

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Speaker 2: manage it. That's what we are doing.

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Speaker 1: And as you say, the markets for the moment haven't

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Speaker 1: really focused on it. But could it change the dynamic

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Speaker 1: in terms of inflation and therefore when we'll see peak

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Speaker 1: interest rates.

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Speaker 2: Look, a lot of focuses obviously now from this event

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Speaker 2: which we have seen last weekend on a price. Oil

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Speaker 2: price has always an impact on inflation. But even outside

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Speaker 2: and the side of the awful events from last week,

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Speaker 2: and I think we see stubbornly high core inflation. The

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Speaker 2: markets were somewhat surprised yesterday with the US numbers, and

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Speaker 2: I do believe that overall we see that interest rates

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Speaker 2: will stay higher for longer, whether we see another step

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Speaker 2: or not. To be honest, very very hard to tell.

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Speaker 2: I think it's not completely it's not completely unthinkable that

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Speaker 2: there is another increase also on the fat side. But overall,

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Speaker 2: we as Steutsche Bank, we are clearly believing that the

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Speaker 2: interest rates which we see right now will be there

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Speaker 2: for longer. And again that is something where our clients

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Speaker 2: need to position for themselves, and that will obviously have

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Speaker 2: an impact also on the economic development next year and

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Speaker 2: in twenty twenty five.

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Speaker 1: There's a lot of concern about the German economy and

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Speaker 1: actually words headed, do you see any stress or any

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Speaker 1: points that we should be careful about amongst your clients

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Speaker 1: in Germany?

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Speaker 2: Yeah, I'm glad that you're asking me because you know

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Speaker 2: there is a lot of discussion. As you said, Germany

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Speaker 2: Sigmund of Europe. By the way, I don't think that

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Speaker 2: Germany is a Sigmund of Europe. But Germany needs some

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Speaker 2: structural reforms and that needs to happen now. Because Germany

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Speaker 2: obviously benefited from our experts to China, Germany benefited from

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Speaker 2: low energy prices, Germany benefited from low interest rates. All

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Speaker 2: that changed and we need to get adjusted to that.

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Speaker 2: But it also means we need structural reforms with regard

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Speaker 2: to energy prices, wis, regard to infra structure, immigration and

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Speaker 2: so on. If we do this, and this is what

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Speaker 2: we jointly have to push for the economy but also

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Speaker 2: the government. If we do this, I think Germany actually

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Speaker 2: will see growth again, potentially not the number which we

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Speaker 2: all wish in twenty twenty four, but from twenty twenty five.

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Speaker 2: With regard to the economy in itself and the resiliency

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Speaker 2: of our corporates, I'm actually seeing a picture which does

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Speaker 2: not worry me. I think there is a lot of

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Speaker 2: resiliency in the portfolio. But again, the real issue is

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Speaker 2: to look forward, and therefore structural reforms are urgently needed now.

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Speaker 1: But given the cost of credit, how much you worry

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Speaker 1: about commercial real estate, which is the one thing that

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Speaker 1: most investors worry about, of which you have a large

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Speaker 1: chunk in Germany.

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Speaker 2: Of well, certainly it's an asset class which deserves monitoring.

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Speaker 2: But again, fortunately from a Deutsche Bank point of view,

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Speaker 2: I think our portfolio is very much contained. We have

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Speaker 2: reported about that. I do think that commercial real estate,

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Speaker 2: in light of the higher interest rates for longer, but

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Speaker 2: also all the developments which we have seen from covied

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Speaker 2: on with work from home, is an asset class which

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Speaker 2: will actually go through more difficult timing for the next

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Speaker 2: couple of years. But it all depends on your underwriting principles,

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Speaker 2: and there I feel very comfortable with that what we

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Speaker 2: have done.

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Speaker 1: Overall, we've seen a lot of alativity in the markets,

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Speaker 1: and some have been on the right side, some have

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Speaker 1: been on the wrong side of bets. I know you're

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Speaker 1: trading revenue to climb in the third quarter, what have

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Speaker 1: you seen?

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Speaker 2: Said, well, I cannot yet comment on the third quarter,

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Speaker 2: but overall, I'm to be honest, I'm very happy also

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Speaker 2: with the trading business overall in doeortsche Bank and what

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Speaker 2: Rama and Fabrics who have established over the last four years.

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Speaker 2: I think we have come to a place that, in

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Speaker 2: particular in certain markets, in particular in the European markets,

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Speaker 2: we have a market leading trading business. And if you

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Speaker 2: are market leading, then the stability is always higher then

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Speaker 2: if you're not market leading. This is exactly what we

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Speaker 2: wanted to achieve and we achieved it. I think the

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Speaker 2: overall goal of Doutsche Bank, and this is what we established,

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Speaker 2: is that we are less dependent on the investment banking

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Speaker 2: and in this regard we significantly strengthen our corporate bank,

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Speaker 2: our private bank, the asset management and we did investments

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Speaker 2: and we just closed it this morning, the Numis investment,

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Speaker 2: where we want to strengthen the capital light business and

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Speaker 2: the advisory business within the investment bank so that the

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Speaker 2: investment bank in itself gets even more diversified. That's what

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Speaker 2: we achieved and this makes me happy.

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Speaker 1: And so what comes next again, this is when you

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Speaker 1: look at revenue generating businesses. After the acquisition at Numis,

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Speaker 1: which was almost a watershed moment right after the difficulties

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Speaker 1: of restructuring the bank, is there anything else that you

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Speaker 1: want to grow in or even buy.

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Speaker 2: No there is with regard to that. Look, we are

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Speaker 2: obviously always looking at the market, but I think the

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Speaker 2: main focus this bank has is profitable growth by itself,

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Speaker 2: and I think we have seen a good momentum in

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Speaker 2: particular in the stable business over the last two years.

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Speaker 2: Of course, the net interesting come helped. But if you

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Speaker 2: really see the underlying mandates we have in the corporate

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Speaker 2: bank but also in the private bank, then I can

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Speaker 2: really see this bank is on a gross pass. We

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Speaker 2: need to do it in a very disciplined way. We

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Speaker 2: cannot let our eyes off the costs, and we need

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Speaker 2: to do it in the environment which we just discussed

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Speaker 2: with strong risk management. But I do believe that Deutsche

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Speaker 2: Bank is there where we wanted to be, on a

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Speaker 2: sustainable gross pass if we stay disciplined on cost center risk.

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Speaker 2: I'm actually very confident about our future.

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Speaker 1: But what your biggest concern in terms of outside shock,

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Speaker 1: I can come.

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Speaker 2: Look, it's it's those concerns Francis, which are which are

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Speaker 2: to be honest, hard to expect and and and how

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Speaker 2: to forecast. Like to be very honest, last week events

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Speaker 2: were not on our radar screen. For that, you need

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Speaker 2: to be prepared and Therefore, I'm always there telling that

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Speaker 2: in a world where geopolitics are leading the economy, you

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Speaker 2: need to be extra vigilant on your risk management. We

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Speaker 2: have done that and therefore we have not suffered from

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Speaker 2: all these items. But of course, if there is a

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Speaker 2: further escalation in the Middle East, then we may face

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Speaker 2: a different picture, and therefore you risk management monitoring is

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Speaker 2: something which is on the top priority of Doutchbank for

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Speaker 2: the time.

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Speaker 1: Christian, thank you so much for your time today. That was,

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Speaker 1: of course Christian saving the Deutsche Bank Chief executive Officer