* Cryan says to hold staff accountable for misconduct
* CEO says to stick to strategic plan but delay details
* Shares rise 3.7 pct (Adds details, background)
By Thomas Atkins
FRANKFURT, July 1 (Reuters) - Deutsche Bank's newChief Executive John Cryan delayed implementing a strategicoverhaul by three months but told staff to expect tough reformsas he shakes up a group that he said had become too diversifiedand complex.
On his first day as CEO of Germany's largest bank, the54-year-old Briton warned employees not to expect only"sweetness and light in the coming months," and that they mustrepair a reputation damaged by misconduct.
"I can tell you that we will decisively identify problems,apply fixes and hold accountable those who misbehave," he saidin a letter to the bank's more than 98,000 workers which waspublished on its web site.
Cryan said he would stick with a strategy set in train by former co-CEO Anshu Jain but delay publication of details of therevamp by three months until the end of October.
Investors want to see the former investment banker, who hasa reputation for swift action and straight talk, tackle a longlist of problems that has pushed Deutsche Bank into a managementcrisis and depressed its share price.
Deutsche Bank shares traded 3.7 percent higher at 1105 GMT.
Deutsche Bank was shaken after its two co-chief executivesquit following a string of regulatory run-ins, failed promisesand a shareholder vote of no confidence.
In a sobering welcome message, Cryan said heavy fines hadstrained the bank's capital base, that relationships withregulators needed repair and decision-making had become slow andcumbersome.
"We have become inward-looking and bureaucratic. Ourconfidence to engage with the outside world has been dented," hesaid.
Cryan's litany of woes echoes those of many European bankssuffering from low interest rates, high costs, bloated balancesheets and rising regulatory capital demands.
His comments resemble those last month by Bill Winters, thenew CEO of Standard Chartered, who also laid down thelaw, saying ethics needed to be beyond reproach and staff neededto fight financial crime.
CUTBACKS
Cryan described the bank as too complex, saying it wasinefficient and burdened by ineffective processes, antiquatedtechnology and unsuccessful investments, touching on criticismsraised separately this week by the head of German financialwatchdog Bafin.
The new CEO vowed to close down business lines with poorprospects or standards. "We will narrow the scope of ouractivities. We do not have to be all things to all people."
Deutsche Bank has been plagued by fines and investigations,faces high operating costs and unhappy unions, and requires hugeinvestments to modernise technology and restructure.
Deutsche and others have seen their profit margins crushedby low interest rates, overdue technology investments and risingregulatory burdens.
The group is also saddled with a sprawling investment bankthat it nurtured while rivals such as Credit Suisse and Barclays cut back after the financial crisis.
In its investment bank, Deutsche has said it wants to reduceactivities in commodities, interest rate repurchase agreementsand derivatives including credit default swaps.
In April, the group's management outlined a new strategicroadmap for 2020. The plan, criticised by investors as short onsubstance, calls for selling the separately-branded Postbank chain, slashing some 4.7 billion euros ($5.2 billion)in costs, closing some 200 retail branches, and carving some 150billion euros from the investment bank's balance sheet.
Cryan affirmed plans to sell Postbank as quickly andeffectively as possible.
Cryan did not mention the issue of capital. The new strategycalls for the bank to fortify its leverage ratio to over 5percent in the next 5 years from 3.4 percent at end-April, andto maintain its core equity tier one ratio of around 11 percent.($1 = 0.9005 euros)
(Reporting by Jonathan Gould and Thomas Atkins; Editing byKeith Weir)
Barclays (BARC)
Standard Chartered (STAN)