QUOTE AND NEWS
Financial Times  5 hrs ago  Comment 
Executives face fraud charges over testimony given in civil case concerning Leo Kirch empire
Benzinga  5 hrs ago  Comment 
Hewlett-Packard Company (NYSE: HPQ) announced on Monday that it will acquire network access solutions provider Aruba Networks, Inc. (NASDAQ: ARUN) for $24.67 per share, or a total of approximately $3 billion (1.7 billion pounds) in...
Benzinga  10 hrs ago  Comment 
In a report published Friday, Deutsche Bank analyst Paul Trussell previewed Target Corporation's (NYSE: TGT) upcoming Analyst Day and compiled a list of 10 questions that management should comment on. 1. How will in-store presentation change...
Forbes  Feb 27  Comment 
Last week, investors reacted negatively to the minutes of the Federal Open Market Committee meeting, but confidence levels improved early this week after Federal Reserve Chair Janet Yellen testified before the Senate Banking Committee. Share...
MarketWatch  Feb 27  Comment 
Deutsche Bank throws in the towel on Hercules Offshore, downgraded it to sell and cutting its price target to zero.
Benzinga  Feb 27  Comment 
On February 26, Deutsche Bank upgraded mega-data center landlord QTS Realty Trust Inc (NYSE: QTS) from Neutral to Buy, and raised its price target from $36 to $39, noting "strong growth ahead" after the QTS Q4 earnings call. Data Center REITs...
Benzinga  Feb 27  Comment 
Deutsche Bank downgraded Hercules Offshore, Inc. (NASDAQ: HERO) Friday from Buy to Sell and cut its price target from $4 to $0. Analyst Mike Urban commented that the "offshore drilling market continues to deteriorate at an accelerating pace as...
Wall Street Journal  Feb 26  Comment 
Deutsche Bank and J.P. Morgan suspended plans for a sale of of Argentine government debt in London, delivering a fresh setback to the cash-strapped South American nation amid a long-running feud with creditors.
Yahoo  Feb 26  Comment 
Deutsche Bank (DBKGn.DE) co-Chief Executive Juergen Fitschen and four former board members will stand trial in Munich on suspicion of having provided false testimony during the Kirch trial, German weekly magazine Der Spiegel said on Thursday....
Yahoo  Feb 25  Comment 
Deutsche Bank AG (DBKGn.DE) said on Wednesday that it has hired JPMorgan Chase & Co (JPM.N) executive Jeff Urwin to be co-head of corporate banking and securities and head of corporate finance. Urwin, 59, had been co-head of global banking at...




 
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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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