German financial giant Deutsche Bank AG's (DB: Quote) outgoing Chief Executive Josef Ackermann on Thursday cautioned that the geopolitical uncertainties will continue to be a concern as the year progresses. According to him, the economic conditions, debt levels and the lack of will to carry out reforms in some euro zone countries remains a cause for worry.
Ackermann said financial market activity is muted and the unemployment rate, especially among young people, in some European countries is alarming. He described the slower pace of growth in Asia as "worrisome."
"Together with geopolitical uncertainties, this could impact the recovery of the global economy over the course of the year. Against this background and the ongoing regulatory debate, financial market activity remains muted," Ackermann said.
Speaking to shareholders at the bank's annual general meeting in Frankfurt, Ackermann, who is leaving after a 10-year tenure, said he sees his successor facing hard times. Ackermann will be succeeded after today's meeting by co-Chief Executives Anshu Jain and Juergen Fitschen.
At his last appearance as CEO, Ackermann also pointed to the darkening economic outlook in Germany. However, he stressed that the bank is well prepared for these conditions with its diversified business model and lower risk structure. "The current quarterly results show our strengths in capital, balance sheet and risk management," he noted.
In late April, Deutsche Bank had said that its Core Tier 1 capital ratio in the first quarter improved and is ahead of time to meet regulatory requirements, while profit plunged amid lower revenues and a charge related to the sale of Actavis Group to Watson Pharmaceuticals.
Ackermann also said today that he was still open in the future of much of the wealth management. According to him, the current inspection process includes all options, including the sale of activities - if the price is right, or not.
The bank, which began a strategic review of its global asset management unit on November 22, had initially entered into exclusive negotiations with the U.S. financial services company Guggenheim Partners. In early May, Deutsche Bank agreed to focus its exclusive discussions with Guggenheim on a potential sale of RREEF, while both mutually ended talks involving three of the division's units - DWS Americas, DB Advisors, and Deutsche Insurance Asset Management.
Deutsche Bank are currently trading at 29.12 euros, up 0.30 euros or 1.02 percent on Frankfurt's Xetra.
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by RTT Staff Writer
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