QUOTE AND NEWS
Benzinga  Nov 26  Comment 
Analysts at Stephens & Co. upgraded Infoblox (NYSE: BLOX) from Equalweight to Overweight, according to Bloomberg. The price target for Infoblox has been raised from $18 to $21. Infoblox shares have dropped 47.35% over the past 52 weeks,...
Commodity Online  Nov 26  Comment 
Whenever the Brent 1M-12M time spread has moved into deep contango OPEC production cuts have typically been not too far behind.
Benzinga  Nov 25  Comment 
In a note out Tuesday morning, Deutsche Bank commented on the catalysts driving oil, especially pertinent in front of OPEC meeting. Highlights from the note: The U.S. rig count was up 1 rig from last week to 1,929 with oil rigs down 4 to...
The Economic Times  Nov 25  Comment 
Last week, MOL said in a stock exchange filing that it would delay its third quarter earnings report, and announced its CFO was leaving.
The Economic Times  Nov 24  Comment 
Deutsche Bank is of the view that banks, over FY15-20 period, have the potential to deliver over 100 per cent returns to shareholders.
Clusterstock  Nov 23  Comment 
The S&P 500 continues to close at new record highs as US stocks continue to be outperformers in the world markets. Deutsche Bank's Binky Chadha reminds us that earnings growth has been relatively strong in the US. Furthermore, investors have...




 
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Deutsche Bank AG (NYSE:DB) is a global financial services firm that offers various financial and investment products to individual, corporate, and institutional clients. Deutsche Bank operates in three divisions: Corporate and Investment Bank, which advises corporate and institutional clients on structuring financial transactions and provides debt and equity issuance; Private Clients and Asset Management, which serves retail and institutional clients and high net worth individuals; and Corporate Investments, which manages the firm’s investments, including its alternative assets. Deutsche Bank’s other offerings include life insurance and mortgage products and services.

Business Overview

Founded in 1870, Deutsche Bank AG was established as an international financial services firm aimed at promoting trading between Germany and other markets throughout Europe and the world. Since then, Deutsche Bank has grown into a leading financial services firm, offering a wide range of financial and related products and services. With nearly 78,000 employees and $2.67 trillion in assets, Deutsche Bank is one of the largest financial institutions in the world.[1]

The firm operates in three divisions:

  • Corporate and Investment Bank (CIB) advises institutional clients on how to structure and execute transactions like mergers and acquisitions. CIB also handles the origination, sale, and trading of equities, debt, and other types of securities.[2]
  • Private Clients and Asset Management (PCAM) provides investment advisory and management services to both institutional and retail investors. Deutsche Bank’s private banking division, which serves high-net-worth individuals and families as well as certain small businesses, also operates within the PCAM segment.
  • Corporate Investments (CI) manages Deutsche Bank’s own investments, including alternative assets like private equity and real estate investments; CI also includes a portfolio of industrial holdings, but these are being eliminated. This segment’s performance depends on changes in the values of its holdings, making it more variable and uncontrollable than Deutsche Bank’s other divisions.

Business & Financial Metrics[3]

In 2009, DB generated a net income of €4.95 billion on revenues of €27.95 billion. This represents a turnaround from 2008, when the company incurred a net loss of €3.90 billion on €13.61 billion in revenues.

Trends and Forces

Declining global M&A activity

When economic conditions take a turn for the worse, fewer firms look to buy and sell other companies, leading to lower revenues for Deutsche Bank and other investment banks that structure these types of transactions. The spreading effects of the credit crunch and the slowdown in the U.S. housing market could drive down the frequency of mergers and acquisitions worldwide. Deutsche Bank would be especially hard hit by a global slowdown in M&A activity since its Corporate and Investment Bank division accounts for well over half of the firm’s pretax income.[4]

Competition

As a diversified financial services firm, Deutsche Bank’s operations span both investment banking and retail banking. Since over half of its profits come from investment banking, however, it’s most often compared to other I-banks such as Goldman Sachs Group (GS), Morgan Stanley (MS), and Merrill Lynch (MER). As Deutsche Bank pares down its retail operations to focus on higher-margin investment banking segments, this comparison will continue to become more appropriate.

References

  1. Deutsche Bank Interim Report as of September 30, 2007 - Fact Sheet
  2. Deutsche Bank Interim Report as of September 30, 2007 - Segmental Results of Operations 9M2007
  3. DB 2009 20-F pg. 2  
  4. Deutsche Bank Annual Report 2006 - Results by Segment
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