The strategic realignment started in 2012 has strongly contributed already to an improved revenue basis in 2013. Setting the continued focus on core businesses may help to create further possibilities for a sustained successful development of our bank and hence may support our revenue growth and profitability. Strict focus on cost discipline has already led to significant cost reductions in 2013. Ongoing analysis of processes and further investments in our IT platforms for the reengineering of our systems could help us to become even more efficient. Competitors’ withdrawing from markets and ongoing de-risking of non-core assets as well as enhanced transparency on the regulatory environment may have a positive impact on the size of our new business and thus strengthen our financial position in 2014.
Our outlook is based on various economic assumptions as described. These assumptions may improve beyond forecasted levels and could lead to increasing revenues that would only be partially offset by additional cost, thus improving both income before income taxes and cost-income ratio directly and subsequently improving regulatory measures such as CET 1 and leverage ratio.
However, the implementation of our initiatives or the realization of the anticipated benefits might also be negatively impacted by certain economic factors such as the resurgence of the European sovereign debt crisis, the recurrence of extreme turbulence in the markets in which we are active, weakness of global, regional and national economic conditions and increased competition for business. Regulatory changes might increase our costs or restrict our activities as capital requirements are in focus and different authorities are pushing for structural changes. Given the fact that these governmental initiatives are all subject to discussions, we cannot quantify any future impact as of today. By nature of our business, we are involved in litigation, arbitration and regulatory proceedings and investigations in Germany and in a number of jurisdictions outside Germany, especially in the U.S. and UK. Such matters are subject to many uncertainties. While we have resolved a number of important legal matters and made progress on others, we expect the litigation environment to continue being challenging.