DB - Deutsche Bank Aktiengesellschaft
10.08 -0.02 (-0.20%)
After hours: 5:26PM EDT
Chart Events
Fast Stochastic
Performance Outlook
- Short Term2W - 6W
- Mid Term6W - 9M
- Long Term9M+
| Previous Close | 9.72 |
| Open | 9.76 |
| Bid | 10.08 x 3100 |
| Ask | 10.09 x 1200 |
| Day's Range | 9.76 - 10.10 |
| 52 Week Range | 4.99 - 11.16 |
| Volume | 4,679,644 |
| Avg. Volume | 5,910,982 |
| Market Cap | 20.952B |
| Beta (5Y Monthly) | 1.61 |
| PE Ratio (TTM) | N/A |
| EPS (TTM) | -1.12 |
| Earnings Date | N/A |
| Forward Dividend & Yield | N/A (N/A) |
| Ex-Dividend Date | May 19, 2017 |
| 1y Target Est | 6.15 |
Fair Value
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- Moody's
Moody's Fully Supported Municipal & IRB Deals
This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
- Bloomberg
A Looming Contest For Unenviable Bank CEO Jobs
(Bloomberg Opinion) -- Plans for a change of leadership at two of Britain’s major banks could hardly be better timed. The economic shock of the pandemic, plus the uncertainty around Brexit, will probably demand a strategic reset at both Lloyds Banking Group Plc and Barclays Plc.Lloyds, the U.K.’s biggest mortgage lender, this week said Chief Executive Officer Antonio Horta-Osorio will step down in 2021 once a successor is found. While Barclays says no search is underway, the lender could seek a replacement for CEO Jes Staley as soon as next year and recently reached out to potential candidates, Bloomberg News reported.Just before markets turned in response to the spread of Covid-19, Lloyds’s stock price was roughly unchanged from its level when Horta-Osorio started in 2011, while Barclays’s shares were down nearly 25% under Staley. Both stocks have fallen sharply in the crisis this year, with the less diversified Lloyds the worst hit. They languish close to lows last seen during the financial and euro-zone debt crises, and trade at discounts to peers.In February, Barclays said Staley was being investigated by the U.K. regulator over how he characterized his relationship with deceased financier and sex offender Jeffrey Epstein. The board unanimously backed him after concluding Staley had been sufficiently transparent with the company. But questions around Barclays’s strategy have been mounting. Staley staked his success on maintaining a sizable securities unit that could compete with Wall Street peers. Among the handful of European firms that still aspire to run global investment banks, Barclays has the advantage of owning an established U.S. franchise through the Lehman Brothers business it acquired during the financial crisis.The approach has rightly attracted opposition. Activist Edward Bramson has been pushing for a retreat from trading given its relatively poor returns. Barclays’s U.K. commercial lending business posted a return on tangible equity of around 18% last year, compared with 8% at the investment bank. At the group level, ROTE stood at 9%.True, a trading surge in the first quarter of 2020 helped the securities unit post better returns than the U.K. business, which had to book provisions for loan losses. But it’s questionable whether this reversal will last once debt markets return to normal activity levels and volatility subsides.Barclays probably needs to dial back, be more selective in investment banking (as are BNP Paribas SA and Deutsche Bank AG) and look elsewhere for growth. Investors would likely reward a less volatile firm with a higher valuation, strengthening the shares as an acquisition currency. Buying a cheaper peer could go some way towards diluting the risk of the investment bank. That opportunity may however not present itself.In the meantime, a further pruning of U.K. retail branches (more than half are within a 10-minute drive of each other, according to analysts at UBS Group AG) and improving cross-selling in the consumer bank look like sensible and available options. All told, that could be enough to re-energize the strategy.As for Lloyds, after almost a decade on the job, Horta-Osorio is one of the longest-serving CEOs in European banking of his time. Having exited state ownership by repairing the balance sheet and becoming more efficient (the cost-income ratio is the envy of European peers) Lloyds is now wrestling with a margin squeeze in the cut-throat home-loans market. It is also exposed to prolonged U.K. economic weakness and any negative impact from Britain leaving the European Union.Horta-Osorio’s successor has little room for maneuver. Overseas expansion would be highly risky. That leaves pushing for further growth in wealth management and insurance, as is reportedly already envisaged. Aside from two dominant players, the U.K. market for financial advice is fragmented with one-third of advisers working for firms with fewer than five professionals. That’s an obvious target for a bank with many affluent account holders on its books.Despite the historically generous pay packets, running big lenders is not an enviable job. A candidate with a choice might find it easier to make a decisive break with the past at Barclays than at Lloyds.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Reuters
EXPLAINER-What you need to know about the Supreme Court fight over Trump's financial records
The U.S. Supreme Court is due to rule on Thursday on three cases involving efforts by Democratic-led House of Representatives committees and a prosecutor in New York City to obtain President Donald Trump's financial records from third parties. Two of the three cases concern attempts by House committees to enforce subpoenas seeking Trump's financial records from three businesses: Trump's longtime accounting firm Mazars LLP and two banks, Deutsche Bank and Capital One.
- Reuters
U.S. Supreme Court to rule on Trump bid to conceal his financial records
The U.S. Supreme Court is due on Thursday to rule on whether Democratic-led congressional committees and a New York City prosecutor can get hold of President Donald Trump's financial records, including his tax returns, that he has tenaciously sought to keep secret. Unlike other recent presidents, Trump has refused to release his tax returns and other documents that could provide details on his wealth and the activities of his family real-estate company, the Trump Organization.
- Business Wire
Deutsche Bank Appointed as Depositary Bank for the Sponsored American Depositary Receipt Program of BlueCity Holdings Limited
Deutsche Bank announced today its appointment as depositary bank for the Nasdaq-listed American Depositary Receipt program of BlueCity Holdings Limited.
- Reuters
U.S. Supreme Court rulings due Thursday on Trump financial records cases
The U.S. Supreme Court is due on Thursday to rule on President Donald Trump's bid to block his financial records from being obtained by Democratic-led House of Representatives committees and a New York prosecutor. Two of the cases involve subpoenas issued by Democratic lawmakers seeking the president's financial records from his longtime accounting firm Mazars LLP and two banks, Deutsche Bank and Capital One. The third involves subpoenas issued to Mazars for financial records including nearly a decade of Trump's tax returns to be turned over to a grand jury in New York City as part of a criminal investigation by the office of Manhattan District Attorney Cyrus Vance, a Democrat.
- Zacks
BNY Mellon & Deutsche Bank Jointly Develop Digital FX Solution
BNY Mellon (BK) and Deutsche Bank's (DB) alliance to develop a digital FX solution will likely reduce the transaction times in trading of emerging market restricted currencies.
- Zacks
Deutsche Bank CEO Sees Slowdown in Trading Activities in 2H20
Deutsche Bank's (DB) chief executive officer believes that the coronavirus outbreak-led volatility is expected to subside in the latter half of 2020, thus leading to a decline in trading activities.
- Zacks
Deutsche Bank Enters Multi-Year Partnership With Google Cloud
Deutsche Bank (DB) seeks to better cater to the needs of customers by introducing innovative technology solutions in partnership with Google Cloud.
- Reuters
PRESS DIGEST- New York Times business news - July 8
- Mark Zuckerberg and Sheryl Sandberg, Facebook Inc's two top executives, met with civil rights groups on Tuesday in an attempt to mollify them over how the social network treats hate speech on its site, but they failed to win its critics over. - White House officials on Tuesday warned a federally administered retirement plan for railroad workers, U.S. Railroad Retirement Board, against investing in Chinese companies and said that additional sanctions could be on the way in return for China's role in spreading the coronavirus. - In a $150 million settlement announced on Tuesday, the New York Department of Financial Services said Jeffrey Epstein, a convicted sex offender, had engaged in suspicious transactions for years, even though Deutsche Bank AG deemed him a "high risk" client from the moment he became a customer in summer 2013.
- SmarterAnalyst
Google, Deutsche Bank Forge 10-Year Cloud Partnership
Alphabet Inc.’s Google (GOOGL) has secured a 10-year agreement to provide cloud services to Deutsche Bank AG (DB).In a joint statement on Tuesday, Deutsche Bank CEO Christian Sewing said, “The partnership with Google Cloud will be an important driver of our strategic transformation.”The companies intend to close the deal in the coming months but they are not publicizing the exact amounts of the arrangement or how much it is expected to yield. According to Bloomberg, Google’s deal will make the German lender a cumulative investment return of $1.1 billion, stating that the two companies plan to make dual investments in technology while also sharing the revenue results.“We’re excited about our strategic partnership and the opportunity for Google Cloud to be helpful to Deutsche Bank and its clients as they grow their business and shape the future of the financial services industry,” said Sundar Pichai, CEO of Alphabet. With Google winning the Deutsche contract after a 3-month bidding process, it added its third bank to the Google Cloud portfolio. The other major banks include HSBC Holding Plc (HSBC) and the UK bank, Lloyds Banking Group PLC (LYG) which signed a 5-year contract with Google in March. Microsoft’s Azure and Amazon Web Services have been the industry leaders in cloud computing, attracting the lion’s share of the financial sector for enterprise-level cloud deployment.Needham analyst Laura Martin assigned a Buy rating on the stock today with a price target of $1800 implying 20% upside noting that “Google is the dominant search engine” in the U.S. and Europe with global shifts in advertising benefiting the company. She added, “Risks to our price target include COVID-19's impact on consumer spending and ad spending growth.”Google’s stock is up 12% year-to-date with 29 analysts assigning Buy ratings, 2 with Hold ratings, and no Sell ratings which altogether results in a Strong Buy consensus. The average analyst price target stands at $1527.66 (2% upside potential). (See Google's stock analysis on TipRanks).Related News: Google, Temasek Are Said To Be In Talks To Invest Up To $1B In Tokopedia Google Snaps Up Canadian Smart Glasses Startup North Google’s $2.1 Billion Fitbit Bid Challenged By Australia’s Competition Regulator More recent articles from Smarter Analyst: * Uber Launching Grocery Delivery Service In Latin America, Canada, And US * Facebook: COVID-19 and Ad Boycott Result in Top Analyst Slashing Estimates * Is Uber Eyeing Postmates Opportunity After Grubhub Disappointment? Analyst Weighs In * Get on Board the Pinterest Train, Says 5-Star Analyst
- MarketWatch
Deutsche Bank to pay $150 million fine over compliance failures related to Jeffry Epstein
Deutsche Bank AG has agreed to pay a $150 million fine for significant compliance failures in its dealings with Jeffrey Epstein. The agreement is the first enforcement action by a regulator against a financial institution for dealings with registered sex offender Jeffrey Epstein, according to the New York State Department of Financial Services, or DFS. The agreement also covers compliance issues relating to Danske Bank Estonia and FBME Bank. "In each of the cases that are being resolved today, Deutsche Bank failed to adequately monitor the activity of customers that the Bank itself deemed to be high risk," Linda Lacewell, superintendent of the DFS said in a statment. " In the case of Jeffrey Epstein in particular, despite knowing Mr. Epstein's terrible criminal history, the Bank inexcusably failed to detect or prevent millions of dollars of suspicious transactions." Epstein, who committed suicide while awaiting trial on charges of sex trafficking and abuse of minors last August, used Deutsche Bank to make payments to individuals who were alleged to have been co-conspirators in sexually abusing young women, said the statement. The bank also handled settlement payments of more than $7 million and made dozens of payments to law firms for what appear to be legal costs for Epstein and others. It handled payments to Russian models, payments for women's school tuition, hotel and rent expenses, and payments to women with East European surnames, said the statement. Epstein also made periodic suspicious cash withdrawals of more than $800,000 over a four-year period. Deutsche Bank Chief Executive Christian Sewing acknowledged the failure ion a memo to staff posted on its website. "Onboarding the latter (Epstein) as a client in 2013 was a critical mistake and should never have happened," Sewing wrote.
Reuters VideosDeutsche Bank to pay $150 mln penalty over Epstein
Jeffrey Epstein is about to cost Deutsche Bank 150 million dollars. That’s the penalty the German lender will pay for oversight failures including services it provided to the disgraced financier. Epstein committed suicide last August while awaiting trial on charges of trafficking minors. Now New York authorities say the fine is the first enforcement action against a bank over dealings with him. The state’s Department of Financial Services said Tuesday (July 7) that Deutsche failed to monitor Epstein properly, despite ‘ample’ public evidence of his misconduct. It says the bank processed hundreds of transactions that should have had more scrutiny. That included payments to victims, alleged accomplices, and law firms representing Epstein. In a statement, state governor Andrew Cuomo said big institutions ignored Epstein’s history, and lent him their credibility, in return for financial gain. On Tuesday Deutsche chief executive Christian Sewing said in a memo to staff that it had been a ‘critical mistake’ to take on Epstein as a client back in 2013.
- BBC
Deutsche Bank faces $150m fine for Jeffrey Epstein ties
New York regulators cited "significant compliance failures" at the German bank.
- Bloomberg
Deutsche Bank’s Epstein Lapses Spur $150 Million N.Y. Fine
(Bloomberg) -- Deutsche Bank AG will pay New York’s banking regulator $150 million for a string of compliance lapses including a half-decade of lax oversight of the financial dealings of convicted sex offender Jeffrey Epstein.New York’s Department of Financial Services provided fresh details Tuesday of Epstein’s money movements in the years before his death. It laid out how Deutsche Bank sought him out as a customer after his conviction for soliciting underage girls in Florida -- and then helped him pay out millions of dollars in legal settlements, send money to women in eastern Europe and withdraw some $800,000 in cash for “travel, tipping and expenses,” according to the regulator.Epstein’s victims may be emboldened by the action in their efforts to seek accountability and compensation from Epstein’s estate. They also could be looking for new information to arise from the arrest last week of Ghislaine Maxwell, a longtime Epstein associate who’s accused of recruiting minors who were then sexually assaulted.In its consent order, the regulator also chastised the bank for weak oversight of its correspondent banking relationships with FBME Bank Ltd. and Danske Bank A/S, two institutions deeply embroiled in global money laundering scandals.“Deutsche Bank failed to adequately monitor the activity of customers that the bank itself deemed to be high risk,” DFS Superintendent Linda Lacewell said in a written statement. “In the case of Jeffrey Epstein in particular, despite knowing Mr. Epstein’s terrible criminal history, the bank inexcusably failed to detect or prevent millions of dollars of suspicious transactions.”Deutsche Bank, which cooperated with New York investigators, agreed to the information set out in the consent order.“We acknowledge our error of onboarding Epstein in 2013 and the weaknesses in our processes, and have learnt from our mistakes and shortcomings,” said Daniel Hunter, a spokesman for the bank. The bank had spent almost $1 billion to improve its anti-money-laundering controls, he said.According to the consent order, after Epstein’s relationship manager at one major bank moved to Deutsche Bank in late 2012, the manager encouraged top executives at Deutsche Bank’s wealth management Americas unit to recruit Epstein as a client. The relationship manager promised that Epstein could generate as much as $100 million to $300 million in flow, as well as $2 million to $4 million in annual revenue over time.The regulator didn’t identify Epstein’s previous bank. He was a longtime client of JPMorgan Chase & Co.’s private bank, which severed the relationship around that time, after Epstein’s Florida conviction.Despite the reputational risk that Epstein already represented, Deutsche Bank’s wealth management’s leadership approved him as a client. They allowed him to shield his identity by keeping his funds in a variety of entities that didn’t bear his name.Soon after moving his funds to Deutsche Bank, Epstein began sending out payments of more than $10,000 to individuals who had been identified in news accounts as his co-conspirators. Many of the payments came out of an entity created by Epstein, referred to as the “Butterfly Trust.”The Epstein associates aren’t identified in the New York filing. Maxwell is alleged in numerous media accounts to have been Epstein’s primary facilitator.Read More: Maxwell Case Will Unearth Secrets Epstein Took to His GraveOver time, according to the New York regulator, Epstein paid out $2.65 million to his co-conspirators as well as various “women with Eastern European surnames,” ostensibly for hotel expenses, tuition and rent. Epstein characterized the women to the bank as employees or friends, according to DFS.Epstein also paid out $7 million in apparent legal settlements and another $6 million to pay his own legal expenses and those of his co-conspirators, the regulator said.The consent order also describes a series of withdrawals by Epstein’s personal lawyer totaling some $800,000 over a four-year period. The lawyer, who isn’t identified, asked the bank how much he could withdraw without setting off compliance alarms, according to DFS. The lawyer then spread out nearly 100 withdrawals, of $7,500 apiece, to keep them from going over the suggested limits, telling the bank the funds would be used by his client for “travel, tipping and expenses.”The DFS also criticized Deutsche Bank’s lax approach to its correspondent banking relationships with FBME and Danske Bank, both eventually hobbled by money laundering scandals.Although Cyprus-based FBME raised red flags on Deutsche’s risk-rating metric, the bank processed 478,379 dollar-denominated transactions over the course of its relationship, amounting to $618 billion. Deutsche Bank terminated the relationship in 2014, when the U.S. Treasury’s Financial Crimes Enforcement Network labeled FBME a “primary money laundering concern.”FBME was ultimately shut out of the U.S. financial system in 2017 after the Treasury Department accused it of laundering money for international terrorist and criminal organizations.As for Danske Bank, Deutsche Bank entered into a correspondent relationship with the Danish lender’s Estonia office in 2007. Over the next eight years, the risk rating of the Estonia branch went from bad to worse.Although Deutsche Bank compliance managers continued to warn Danske of its growing problems, the Frankfurt lender didn’t cut ties to Danske until 2015. Danske Bank later admitted that roughly $230 billion that passed through its Estonian unit between 2007 and 2015 was suspicious; much of that moved through Deutsche Bank.“The DFS’s factual findings on Danske Estonia and FBME, like our own internal investigation, identified various deficiencies in our oversight and monitoring of the banks that used our clearing services,” Hunter, the Deutsche Bank spokesman, said. “There was no intentional effort by anyone within the bank to facilitate unlawful activity.”Read More: Deutsche Bank’s U.S. Unit Kept Danske’s Shady Billions Flowing(Updates with Deutsche Bank spokesman)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- FX Empire
Google And Deutsche Bank Announce Strategic Partnership
Alphabet’s Google and Deutsche Bank have announced to form a strategic partnership to provide the German lender access to cloud services and create innovation in technology-based financial products for clients.
- Bloomberg
Deutsche Bank’s DWS Considers Sale of Funds Platform IKS
(Bloomberg) -- Deutsche Bank AG’s asset management arm is considering a sale of investment funds platform IKS, according to people familiar with the matter, little more than two years after identifying it as a key growth area.DWS Group, which is majority owned by Germany’s largest bank, is weighing a disposal of part or all of the IKS business, the people said, asking not to be identified as the matter is private. It hasn’t begun a formal sale process, according to the people.A representative for DWS said it continuously evaluates its strategy amid consolidation in the asset management industry. “As part of this ongoing assessment, we will weigh strategic options for our fund management platform,” they said.Platforms like IKS typically offer investors access to a range of investment products, including exchange-traded funds, in one place. IKS serves around 2 million clients with more than 100 billion euros ($113 billion) under management, according to one of the people.In spring 2018, DWS Group said it was bringing its digital fund management businesses under the IKS brand in a bid to seize opportunities in the robo-advisory market, which is changing the way retail investors in particular build portfolios in Europe. DWS Group is one of the region’s largest ETF providers through its Xtrackers unit.Fund platforms require major technology investments to succeed and a number of banks, including UBS Group AG and Credit Suisse Group AG, have sought to offload such businesses amid broader cost pressures. UBS agreed to sell its Fondcenter arm to Deutsche Boerse AG-owned Clearstream in January, while Credit Suisse sold its third-party funds platform InvestLab to Allfunds last year.While it continues to keep an eye on its cost base, DWS isn’t the focus of a broader restructuring underway at Deutsche Bank. The German lender said a year ago that DWS remains a pillar of its growth strategy.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Reuters
Wirecard administrator sees strong interest from potential buyers
Wirecard's <WDIG.DE> administrator said on Tuesday that more than 100 investors have expressed interest in buying the collapsed German payments firm's core business and holdings. The firm filed for insolvency last month owing creditors 4 billion euros ($4.5 billion) after disclosing a 1.9 billion euro hole in its accounts that its auditor EY said was the result of a sophisticated global fraud. "The aim is to find timely investor solutions in the interest of creditors, employees and customers," administrator Michael Jaffe said in a statement after a creditors meeting.
- Financial Times
Deutsche Bank fined for Jeffrey Epstein ‘compliance failures’
Deutsche Bank has agreed to pay a $150m fine for compliance failures in its dealings with Jeffrey Epstein, the late disgraced financier, as well as Danske Bank Estonia and FBME Bank. The German lender processed millions of dollars of potentially suspicious transactions by Epstein, a registered sex offender, including payments to alleged co-conspirators, Russian models, and $800,000 in suspicious cash withdrawals, the New York State Department of Financial Services said on Tuesday. “Despite knowing Mr Epstein’s terrible criminal history, the bank inexcusably failed to detect or prevent millions of dollars of suspicious transactions,” Linda Lacewell, the superintendent of financial services, said in a statement.
- Reuters
Deutsche Bank and Google agree multi-year, strategic partnership
Deutsche Bank <DBKGn.DE> said on Tuesday it has agreed a strategic, multi-year partnership with Google <GOOGL.O> to give the German lender access to cloud services and drive innovation in technology-based financial products for clients. Earlier this year, Deutsche invited bids from Google, Microsoft <MSFT.O>, and Amazon <AMZN.O> to overhaul the bank's outdated and fragmented technology networks. The deal is part of a 13 billion euro ($14.70 billion)technology investment Deutsche has planned up to 2022 as it restructures to recover from years of losses.
- Bloomberg
Google, Deutsche Bank Agree to 10-Year Cloud Partnership
(Bloomberg) -- Alphabet Inc.’s Google and Deutsche Bank AG have agreed to form a long-term partnership that will see the U.S. technology company provide cloud computing capabilities to Germany’s largest lender.“The partnership with Google Cloud will be an important driver of our strategic transformation,” Deutsche Bank Chief Executive Officer Christian Sewing said in a joint statement Tuesday, confirming an earlier Bloomberg News report. “It is as much a revenue story as it is about costs.”The contract is set to last at least 10 years and Deutsche Bank expects to make a cumulative return on investment of 1 billion euros ($1.1 billion) through the alliance, according to people with knowledge of the matter, who asked not to be identified disclosing private information. The companies also plan to make joint investments in technology and share the resulting revenue, which could lead to engineers from both firms developing products together, they said.Sewing a year ago unveiled a strategy centered around deep cost cuts, including spending on information technology. He also hired Bernd Leukert, a former executive at German software giant SAP SE, to accelerate the bank’s efforts to digitize its operations.The companies declined to comment on how much Deutsche Bank will pay for Google’s services, and the bank didn’t indicate what cost savings it expects to generate from the arrangement.European banks in recent years have started pouring billions of euros in attempts to modernize their IT, frequently opting to put more of their data onto the cloud. That has lured the big U.S. providers including Google, Microsoft Corp. and Amazon.com Inc., according to a Bloomberg survey conducted earlier this year.Win for GoogleThe deal is a notable win for Google as it tries to show that its cloud business can service the financial sector. To date, Google’s only major bank customer was HSBC Holdings Plc. But Thomas Kurian, the head of Google’s cloud division, has made the financial industry one of his key customer targets since joining in late 2018.“We’re excited about our strategic partnership and the opportunity for Google Cloud to be helpful to Deutsche Bank and its clients as they grow their business and shape the future of the financial services industry,” Alphabet CEO Sundar Pichai said in the press release.The companies have signed a non-binding letter of intent and plan to finalize the contract in the coming months, they said in the release.Google’s latest cloud pitch involves including other parts of the search giant’s empire, such as its advertising business and stable of engineers. A recent cloud deal in travel, for instance, had Google co-developing products in the sector. That’s now happening in finance, another sector that Google has tentatively worked with for years.The increasing reliance on U.S. firms has stoked concerns in Europe’s technology industry, and banking executives have called on companies in the region to develop alternatives. Sewing in 2018 called “the likes of Google” the biggest threat to traditional banks.(Adds CEO comments in second and eighth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Bloomberg
New York Private Equity Goes for the Jugular in Germany
(Bloomberg Opinion) -- Cerberus Capital Management LP has gone for the jugular. The New York private equity firm has been pushing Commerzbank AG to ramp up its cost cutting because of its dismal profit prospects and a share-price slump, and its campaign has prompted the departure of both the German lender’s chairman and its chief executive officer.However, a leadership vacuum in the midst of the worst recession in living memory isn’t ideal. While a fresh management vision will deepen Commerzbank’s restructuring plans, the search for suitable successors will delay the overhaul.Other investors, including the German government, are also eager to put the bank on a track toward sustainable profitability. But there’s a limit on how far cost reductions can help. Germany is a notoriously over-banked market, so there’s too much competition, and the country’s powerful labor unions were already opposed to the departing Commerzbank CEO’s existing job-cutting plans. First, there’s the succession to deal with. Cerberus — owner of a 5% stake in Commerzbank — wants to replace Chairman Stefan Schmittmann first, before finding a successor to CEO Martin Zielke. The bank wants to do the opposite, according to Bloomberg News, preferring the quick appointment of an internal candidate as CEO because it doesn’t want to hold things up by waiting on a new chairman. Schmittmann leaves next month and a permanent chairman may need to come from outside the bank given the lack of options on the supervisory board.That could draw out the management succession into late summer. But maybe this wouldn’t be such a terrible thing. The next couple of months should make clearer just how painful the Covid-19 recession has been for Commerzbank’s small and medium-sized company customers — the most prized part of its business. Pausing the restructuring until there’s more visibility has some merit.Letting a new chairman help choose the CEO would also allow the bank to cast a wider net. While there are several potential internal candidates to succeed Zielke, none appears to be a shoo-in. Roland Boekhout, the new head of corporate clients, is the leading internal candidate, according to Bloomberg News. His record at ING Groep NV’s German unit was impressive but he’s only been with Commerzbank since January. Another front runner, the finance director Bettina Orlopp, has been in her position since April.Zielke was in the middle of an overhaul that would have seen 7,000 more job cuts, on top of the 4,000 lined up last year. The execution of any cost reduction plan remains critical after the outgoing CEO failed to deliver on his financial targets. Labor representatives — which pushed back on Commerzbank’s merger attempt with Deutsche Bank AG last year and which control half the supervisory board — have vowed to fight the jobs plan.Commerzbank shares rose on Monday, but they still value the lender at just 22% of its tangible book, a sign of its frailty. For Cerberus, the visible results of its pressure will help show its backers that it’s not sitting idle. Zielke’s target for a 4% return on tangible equity was so unambitious that it drew criticism even from German banking regulators, so there’s no great sorrow about his departure. Worker representatives won’t be able to ignore the sense of urgency that the tumult at the top has brought to light. But, as I’ve argued before, making money in Germany’s commercial lending market while interest rates remain negative is a hard task. At some point, Commerzbank may draw fresh suitors. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Financial Times
Deutsche Bank’s new-found momentum is unlikely to last
It is more than a decade since Deutsche Bank’s glory days, when an investment bank that appeared to rival Wall Street’s finest was rewarded with a surging share price. The 2008 financial crisis and the regulatory changes that followed it proved that many big banks — and Deutsche possibly most of all — had feeble foundations.
- Insider Monkey
Is Deutsche Bank Aktiengesellschaft (DB) Going to Burn These Hedge Funds?
We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not […]
