Deutsche Bank pledges ambitious cuts Deutsche Bank has promised more cost cuts and will place extra curbs on top bankers" pay as its new leadership revealed its strategy to steady Germany's flagship bank. Anshu Jain and Jürgen Fitschen laid out plans to steer Deutsche through what is expected to be a turbulent period of lower profits and regulatory change for global banks. They pledged that Deutsche would be at the forefront of a change in investment banking culture, responding to public anger at excessive risk-taking and large staff bonuses as well as the bank's involvement in regulatory probes such as inquiries into interest rate manipulation. Deutsche's co-chief executives responded to investor pressure to shore up the bank's capital base by promising deeper cuts to its balance sheet rather than raising more equity from shareholders. Deutsche, the eurozone's largest bank by assets, will create a "non-core operations" unit to get rid of €135bn of risk-weighted assets - about one-third of the total - over the next four years. The bank will aim to generate a post-tax return on equity of at least 12 per cent - broadly in line with peers but sharply down on the pre-tax return of 25 per cent that Deutsche aspired to before the financial crisis. Deutsche said it would spend about €4bn over three years to be able to lower its operating costs by €4.5bn annually. The bank's goals for cost reductions and balance sheet cuts are more ambitious than previously announced. Top managers at the bank will in future qualify for bonus payments only after five years, removing rights to any interim payments in what the bank described as "cliff vesting" of the bonuses. Deutsche also said an independent review panel would scrutinise its pay system, but Mr Jain said Deutsche would not go as far as to impose any absolute caps on pay. Having earlier called off plans to sell many of its asset management businesses, Deutsche said it believed it could double earnings from asset and wealth management over the next three years, relying mainly on cost cuts. Deutsche also said it could double profits over the same period from transaction banking and said pre-tax profits from retail banking, including its Postbank arm, should rise from €2bn to €3bn. Deutsche gave no profit target for its investment bank, where it plans to cut €1.9bn of costs having announced 1,500 job cuts. The investment bank has usually generated about two-thirds of group profits, but Deutsche has previously indicated that this could fall to about 50 per cent as other divisions grew. The bank said it wanted to end its historical lack of balance in its earnings and the long-term underperformance of some businesses. Mr Jain and Fitschen took over as co-chief executives after Josef Ackermann retired in May. Under Mr Ackermann, the bank steered clear of requiring government aid during the crisis but has remained thinly capitalised compared with many peers. Speaking in Frankfurt on Tuesday, Mr Jain said Deutsche was "not where it should be" in terms of capital strength. "There has been peer group movement that puts us at the bottom end," he said. Of the €135bn of non-core assets to be ringfenced for disposal or winding down, about €45bn should be dealt with by March next year, according to Deutsche. That is meant to help the bank meet a target of then having core tier one capital of 8 per cent, when measured using the new "Basel III" banking rule book. Deutsche said it wanted the ratio to improve to at least 10 per cent by early in 2015.