UPDATE 1-Deutsche Bank's new CEO sees "tough decisions" ahead

* New CEO Sewing says must avoid another setback like in Q4

* Says to review how to position Deutsche's investment bank

* Says investment bank to pull back from unprofitable areas

* Says must set bar for revenues high, reach 2018 cost targets (Recasts, adds further CEO comments)

FRANKFURT, April 9 (Reuters) - Deutsche Bank leadership must take "tough decisions" to avoid another setback like in the fourth quarter, when its net loss widened, and stick with its cost targets, new Chief Executive Christian Sewing said in a letter to employees.

"The new leadership team will not accept this anymore," Sewing said in the letter, which Deutsche Bank published on its website on Monday.

Deutsche Bank, battling with losses for three consecutive years, named retail specialist Sewing as its CEO late on Sunday, signalling a possible retreat from decades of empowering investment bankers at Germany's largest lender.

Sewing said in his letter that he would thoroughly analyse how Deutsche Bank wants to position its investment bank in a difficult market environment.

"The priority is to leverage our strengths and to allocate our investments accordingly. And at the same time we will look to free up capacity for growth by pulling back from those areas where we are not sufficiently profitable," he said, without providing details.

Sewing, 47, had been deputy CEO, with a background in retail banking, auditing and risk. His promotion comes as the bank and its key shareholders debate the path forward for its investment banking unit, where revenues have slowed and key staff defected.

He said Deutsche Bank needed to set the bar for revenues higher in all businesses and stick with its 2018 target for adjusted costs of no more than 23 billion euros ($28 billion).

Sewing, a German national, replaces John Cryan, a Briton.

Cryan had been in charge since 2015 and his mandate would have expired in 2020, but investors had lost faith that he could return the bank to profitability. ($1 = 0.8145 euros) (Reporting by Maria Sheahan; Editing by Himani Sarkar)