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* 2018 targets depend on eliminating 2015, 2016 dividends
* Targets include CET 1 ratio of at least 12.5 pct
* Leverage ratio to be at least 4.5 pct, RoTE more than 10pct
* Cost/income ratio to be about 70 pct, RWA of about 320 bln
* Deutsche plans "competitive payout ratio" from fiscal 2017 (Adds peer comparison, analysts' expectations)
By Arno Schuetze
FRANKFURT, Oct 28 (Reuters) - Deutsche Bank saidit would sacrifice its 2015 and 2016 dividends as new ChiefExecutive John Cryan seeks to bolster the bank's capital andretain money to pay for sins of the past.
Cryan is under pressure to overhaul Germany's biggest bank,with costly litigation from past scandals and fallout from amarket rout in Asia pushing its valuation well below rivals.
Deutsche Bank said on Wednesday it was targeting a reductionof its risk-weighted assets to about 320 billion euros ($349billion) by end-2018 from 416 billion euros at the end of June -towards the top end of analysts' expectations.
"The plan is based on the elimination of the Deutsche Bankcommon share dividend for the fiscal years 2015 and 2016," itsaid in a statement, adding that it aimed to resume payingdividends thereafter "at a competitive payout ratio".
Ever since its post-World War Two reestablishment in 1952,Deutsche Bank has always paid a dividend.
Earlier this month, the lender announced it would split itsinvestment bank in two and part ways with three of its eightmanagement board members.
The bank also said it was aiming to bring down adjustednon-interest expenses to less than 22 billion by 2018 from 23.8 billion euros in 2014, and to reduce its cost/income ratio to 70percent in 2018 from 84.3 percent at the end of June.
By comparison, peers Barclays, Credit Suisse and UBS, which are also cutting costs anddevising new strategies, currently only spend 64 to 77 cents toearn a euro.
Other major international banks such JP Morgan orUBS made swifter changes to their strategies to addresspersistently low interest rates and tighter regulation after thefinancial crisis.
As part of the revamp, Deutsche aims to cut about 23,000jobs, or roughly a quarter of its workforce, by reducingtechnology activities and spinning off its PostBank unit, people familiar with the matter told Reuters last month.
Cryan said earlier this month a record pretax loss of 6billion euros in the third quarter would also mean that staffwill get lower bonuses.
While Credit Suisse, which also intends to slim down itsinvestment bank, plans to raise 6 billion Swiss francs ($6billion) from investors to bolster capital, Deutsche Bank hasnot so far signalled it is considering such a step.
The capital hike will bring Credit Suisse's capital ratio to12.2 percent, while UBS had 14.4 percent at the end of June andthe average for Europe's 24 biggest banks was 13.2 percent,lifted by high levels at Nordic lenders.
Deutsche Bank is targeting a capital ratio of at least 12.5percent and a leverage ratio of at least 4.5 percent from theend of 2018. At the end of June, the respective readings were11.4 percent and 3.6 percent.
($1 = 0.9161 euros)
($1 = 0.9945 Swiss francs) (Reporting by Arno Schuetze; additional reporting by AlexanderHuebner; Editing by Georgina Prodhan and John Stonestreet)
