DB - Deutsche Bank Aktiengesellschaft
7.95 -0.01 (-0.13%)
After hours: 4:00PM EDT
| Previous Close | 7.80 |
| Open | 7.91 |
| Bid | 7.96 x 36200 |
| Ask | 7.97 x 21500 |
| Day's Range | 7.90 - 7.98 |
| 52 Week Range | 6.61 - 13.17 |
| Volume | 4,934,565 |
| Avg. Volume | 5,405,260 |
| Market Cap | 16.336B |
| Beta (3Y Monthly) | 1.50 |
| PE Ratio (TTM) | N/A |
| EPS (TTM) | -1.12 |
| Earnings Date | N/A |
| Forward Dividend & Yield | N/A (N/A) |
| Ex-Dividend Date | 2017-05-19 |
| 1y Target Est | 6.72 |
Meredith Videos•7 days agoDeutsche Bank Is Completely Restructuring Its Business
And is laying off 18,000 as a result.
- Zacks•7 hours ago
UBS Group's (UBS) Q2 Earnings Rise Y/Y on Lower Expenses
For the second quarter, UBS Group (UBS) reports rise in fees and commissions and fall in expenses, partially offset by lower interest income.
- Bloomberg•yesterday
Europe’s Bank Earnings to Offer Glimpse Into Negative-Rate Abyss
(Bloomberg) -- If you thought U.S. bank earnings were worrisome, wait for the Europeans.As top Wall Street banks warn of zero Treasury yields and falling income from lending, their European peers have been dealing with negative rates for half a decade, with an end looking increasingly far off. The drought has left them without a cushion to fall back on when income from trading dries up, as it did in the first half, and it’s one reason why once-mighty Deutsche Bank AG just announced the most radical cuts yet to its investment bank.The second quarter will probably provide more evidence how damaging zero or negative rates are for an industry that at its core depends on clients paying to borrow money. Revenue at eight of Europe’s top lenders is set to decline 2.7% on average from a year earlier, according to filings and analyst estimates. That compares with a 0.5% gain for the top U.S. peers, many of which still managed to post record earnings after nine interest rate increases by the Federal Reserve since late 2015.“The focus for European banks is really on revenue,” said Jonathan Tyce, an analyst at Bloomberg Intelligence. “Rates are set to go down, which means lower loan loss provisions, but that doesn’t make up for the loss in revenue. All this keeps bringing you back to costs.”Here’s a guide to what investors will be looking for when the top lenders start to report on Tuesday:SwitzerlandUBS Group AG (July 23) will give investors a first look into European bank earnings. It has indicated that trading conditions improved from what CEO Sergio Ermotti called “one of the worst” first quarters in recent history. The world’s largest wealth manager is less dependent on trading revenue that peers, but trade worries and market swings still affect how much money it attracts from rich clients. Attention will also be focused on the business of advising on deals as well as stock and bond issuance after a poor run and last year’s departure of rainmaker Andrea Orcel.Credit Suisse Group AG (July 31), the second-largest Swiss bank after UBS, is coming off a strong first quarter that showed CEO Tidjane Thiam’s painful three-year restructuring is bearing fruit. But after the surprise loss of a key wealth management executive, Iqbal Khan, investors will be looking at whether the growth momentum in a key pillar of the bank will continue. The main trading unit, which managed to outperform peers in the first quarter, will have to show that it wasn’t just a one-off.Swiss banks could disappoint, should Julius Baer Group Ltd. be any guide. The lender said on Monday that it saw net new money in the first half hurt by the exits of some clients, as it purges risky accounts, and by a wider application of negative interest rates to large cash holdings.GermanyDeutsche Bank (July 24) unveiled its biggest overhaul in decades this month, including a plan to exit its underperforming stock trading business. The move was partly driven by low interest rates and the company now assumes that European short-term rates will rise to just 0% in 2021. Deutsche Bank also offered insight into second-quarter earnings with a 5.9% slide in revenue. Costs and profit figures fell short of expectations, even before the bank said it expects 3 billion euros of restructuring charges in the period. Deutsche Bank says about 75% of the investment banking businesses it wants to keep will have a top five market position, and the release this week will give investors a glimpse of how they’re holding up.Commerzbank AG (Aug. 7) explored a merger with Deutsche Bank earlier this year, but talks fell apart. That didn’t make the bank’s challenges go away: Germany’s second-biggest listed lender is one of the banks hit hardest by the European Central Bank’s rate policy because it holds a large amount of deposits and is heavily reliant on lending income. Commerzbank plans a strategy update this fall after scrapping several financial goals earlier this year. The company is seen as a takeover target because it offers a foothold in Europe’s largest economy. While negative rates should accelerate consolidation, a lack of confidence within the industry is now the biggest impediment to necessary cross-border mergers, according to Casper von Koskull, the CEO of Nordea Bank Abp.FranceBNP Paribas SA (July 31) seemed poised to benefit from Deutsche Bank’s woes after striking a preliminary agreement to take on the hedge fund and electronic trading clients of the German lender’s equities business. But transferring balances is said to be difficult, and investors will be looking for updates on the transaction. They will also want evidence that BNP’s existing equities-trading business is turning the corner after embarrassing losses late last year. Analysts at JPMorgan Chase & Co. expect a 26% drop in equities revenue in the second quarter from a year earlier.Societe Generale SA (Aug. 1) is shrinking parts of its investment bank and cutting 1,600 jobs globally in an attempt to boost profitability. Investors will keep a close eye on the bank’s capital buffer, which has been among the weakest of the region’s large lenders. Analysts at JPMorgan say SocGen should reduce its dividend by two-thirds to ease concern about a possible capital shortfall by 2021. CEO Frederic Oudea has said he’s comfortable he can meet the capital goals while maintaining his dividend policy.Natixis SA (Aug. 1) has had its own string of issues to contend with. After losses from exotic derivatives and a slump at the bank’s fixed-income unit, last quarter brought a meltdown at one of its boutique asset management businesses. London-based H20 Asset Management suffered $9 billion of redemptions after it emerged that one of its funds invested substantial amounts in the debt of a controversial German financier. Investors will want to see evidence that flows at Natixis’ broader asset management business are resilient, according to Bloomberg Intelligence.ItalyLow rates haven’t been all bad. In Italy, banks have been able to draw some benefit from lower funding costs from long-term rates as well as help in reducing a mountain of bad debt, though low short-term rates are still a burden on income. UniCredit SpA (Aug. 7) is taking steps to put itself in a stronger financial position as CEO Jean Pierre Mustier prepares a growth plan to follow a three-year cleanup. Italy’s biggest bank by assets is now emerging as one of the few firms in position to consolidate, and is among lenders said to have been interested in a potential takeover of Commerzbank. Mustier, in an interview published over the weekend, told Milano Finanza that the new business plan will have organic growth as “precondition.” Investors will be looking for any update on the options the CEO is eyeing.U.K.While trading revenue at Barclays Plc’s (Aug. 1) investment bank fared better than its U.S. rivals earlier this year, the picture for the second quarter looks bleak. JPMorgan analysts have predicted a 22% slump in equity revenue. The analysts also see “negative implications” for the U.K. economy from Brexit. A scandal dating back several years related to the sales of payment protection insurance will probably continue to hurt earnings at most British banks.HSBC Holdings Plc (Aug. 5) investors will be looking to see whether Europe’s largest lender was able to keep revenues growing at a faster pace than costs, after the bank hit the key target in the first quarter. Several hundred jobs are being cut in the global banking and markets division and poor trading performance could see HSBC trim this year’s $4 billion investment budget. Shareholders are also looking for signs of management is returning excess capital, for example in the form of buybacks.SpainBanco Santander SA (July 23) is less dependent on its home market than competitors after expanding in regions like Latin America. Still, Europe plays a big enough role to drag on earnings, and it’s the focus of much of a cost drive that includes thousands of job cuts. Of the group’s largest units, the U.K. looks the most vulnerable, with Keefe, Bruyette & Woods forecasting a 36% drop in net income.That’s putting a spotlight on the bank’s capital strength. Chairman Ana Botin has argued the lender can operate with smaller capital buffers because it doesn’t engage in volatile trading like the big investment banks. Botin may also face more questions about the botched hiring of Orcel, the former UBS investment banker who is now suing Santander after the Spanish lender withdrew its job offer.(Adds Julius Baer in eighth paragraph, Nordea in 10th, Mustier in 14th.)\--With assistance from Fabio Benedetti-Valentini, Sonia Sirletti, Patrick Winters, Stefania Spezzati, Harry Wilson and Charlie Devereux.To contact the reporter on this story: Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.netTo contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Christian Baumgaertel, Ross LarsenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Financial Times•2 days ago
The day Deutsche Bank’s boss decided on a radical solution
When a dozen police vans pulled up in front of Deutsche Bank’s twin towers on a grey and chilly Frankfurt morning last November, Christian Sewing knew he was running out of time. The traumatic day symbolised the end of an era for Deutsche, once the world’s biggest bank by assets.
- Financial Times•4 days ago
Deutsche Bank among the near-dead? No, but watch for Plan C
Certain types of people, such as the Parisian demimondaine portrayed by Greta Garbo, have long and tear-filled partings from an unfeeling world. If you listen to conversation over drinks among the supposedly well-informed, Deutsche Bank is also among the near-dead.
- MarketWatch•5 days ago
Deutsche Bank’s planned sale of prime brokerage unit to BNP still in ‘preliminary’ stage
Deutsche Bank’s (XE:DBK) planned sale of its prime brokerage unit to BNP Paribas (XE:BNP) is not yet a done deal as both sides of the proposed transaction keep a close eye on hedge fund withdrawals, two people with knowledge of the situation told MarketWatch. The German lender said its prime brokerage unit was on the block earlier this month when it announced its largest restructuring in decades, including cutting 18,000 jobs, exiting stock sales and trading, and bundling $83 billion of assets into a separate unit for disposal. Since then, hedge funds clients have pulled about $1 billion in assets per day from the platform since its July 7 restructuring announcement, according to one of the people.
- Bloomberg•5 days ago
Nuveen’s Warning to Wall Street: Cut Off Our Muni Rival or Else
(Bloomberg) -- Nuveen LLC was giving Deutsche Bank AG an ultimatum.John Miller, who oversees $160 billion of investments in state and local government bonds for the mutual-fund company, had watched in anger as a Dallas upstart muscled in on his lucrative corner of the municipal-securities market. The latest encroachment: the rival, Preston Hollow Capital LLC, landed $200 million of debt offered by a junk-rated university located in Nuveen’s hometown of Chicago.Now, Deutsche Bank was being told that Nuveen would pull business from the bank for providing financing for Preston Hollow, according to the transcript of a December telephone call filed in a Delaware court.Miller’s subordinate said Nuveen had already penalized Wells Fargo & Co. and Bank of America Corp. And other major banks were being put on notice for working with Preston Hollow, a firm Miller said was hurting the market by charging “predatory” interest rates on bonds it planned to resell to others.“I have been working with John for 15 years and I have never seen him as serious about anything. I mean nothing gets him more upset than these Preston Hollow deals,” said the employee, who wasn’t identified by name in the transcript of the phone call with Deutsche Bank. “We are going to every single bank and broker-dealer today to examine what is the extent of their business, and the policy going forward is that if you are actively doing business with them, Nuveen will not be doing business with you.”The transcripts provide an inside look at a clash in the high-yield municipal market, a $500 billion corner where a flood of cash and relatively scant issuance frequently leaves firms fighting over new debt offerings. Few wield as much influence in that business as Nuveen, a unit of New York’s TIAA.Related: Transcript of John Miller’s call with Deutsche BankIn February, Preston Hollow sued Nuveen in Delaware Chancery Court, alleging the company used its market power to organize an industry-wide boycott against it. The telephone transcripts are at the heart of the case, with Preston Hollow arguing that they show Nuveen engaged in a “campaign of intimidation” to blackball it from the industry.Free to ChooseA spokesman for Nuveen, Stewart Lewack, said Preston Hollow’s claims have no merit and the company intends to “vigorously defend itself” when the case goes to trial later this month. He said the transcripts provide a distorted view of Nuveen’s interactions with brokerage firms. He declined to comment on whether Nuveen pulled its business from banks over their ties to Preston Hollow. Miller didn’t respond to an email seeking comment.A spokesman for Deutsche Bank, Troy Gravitt, declined to comment. Jonathan Morgan, a spokesman for Preston Hollow, said Deutsche Bank didn’t cut its financing to the company.In court filings, Nuveen’s lawyers argued that the firm can choose with whom to do business and select partners based on whether they work with competitors. They said Preston Hollow hasn’t identified any lost business because of Nuveen’s alleged conduct or demonstrated a reciprocal, collusive relationship among Nuveen and Wall Street banks, the filings said. This year, Preston Hollow has purchased at least $136 million bonds in exclusive deals underwritten by Loop Capital Markets LLC, Stifel Financial Corp. and Piper Jaffray Cos., according to offering documents.The lawsuit comes just as competition for the riskiest municipal bonds has intensified as rock bottom interest rates leave investors hunting for larger returns. High-yield municipal securities funds have picked up $10.5 billion of new cash in the first half of 2019, according to Morningstar Inc. data. Miller’s $20 billion fund at Nuveen received 20% of it.Striking Core BusinessSpending the money isn’t always easy. It’s rare to see billion-dollar deals for large speculative projects, such as Virgin Trains USA’s passenger railroad in southern Florida or the American Dream shopping mall in New Jersey’s Meadowlands. Most low-rated municipal-bond deals come in chunks of $50 million or less from smaller borrowers like hospitals, charter schools or senior-living centers.That’s why even a firm like Preston Hollow could create a challenge for far bigger rivals. Rather than buy bonds in public offerings, the 5-year-old company negotiates to buy the entire deal in private. That saves borrowers costs for marketing and credit ratings.In a phone conversation with Deutsche Bank, which extended financing to Preston Hollow through a so-called tender option bond program, Miller said the Dallas rival had initially only been doing a “handful” of $20 million to $50 million deals.But it had started buying ones of $100 million or more, including from issuers whose securities Nuveen owned. Miller said that Preston Hollow was engaging in predatory practices by charging overly high interest rates for debt that it didn’t intend to hold on to, creating financial risk for the borrowers and other bondholders.“What’s happened in the last two months really strikes more at the core of our business,” Miller said, according to a transcript of his call filed in court. He later said that their “ability for them to move up the scale into deals that are really hurting us and really hurting our industry. That ability does come from your TOB financing.”‘Devastating News’One of Preston Hollow’s deals was for Roosevelt University, a private school near Chicago’s Grant Park that’s seen enrollment shrink by 30% since 2014. In September 2018, Wells Fargo sold the entire issue, which was done through the Illinois Finance Authority, directly to Preston Hollow, even though Nuveen already owned some of its debt.In the call with Deutsche Bank, the Miller subordinate criticized Preston Hollow for securing “exorbitant” yields and weakening protections for bondholders. “It’s predatory,” the employee said.Allegations that Preston Hollow charged excessive rates and structured rushed deals are false and defamatory, the firm said in court filings. Roosevelt University’s 2018 bonds had stronger financial protections for investors than prior bond issues by the university and Preston Hollow engaged in extensive discussions on the covenants with Roosevelt and its financial adviser, bond counsel and underwriter, said Morgan, the Preston Hollow spokesman.Nuveen suspended its trading with Wells Fargo, the employee said, speculating that the move helped contribute to the ouster of the bank’s public finance chief, Stratford Shields, after about a year on the job. Deutsche Bank needed to cut off the liquidity and unwind financing to Preston Hollow, the employee explained, or Miller would reduce Nuveen’s business with the bank “to zero.”“It’s devastating news,” one unidentified Deutsche Bank employee said.Shields said through a spokesman that the comments cast doubt on the company’s previously stated reasons for his ouster. A spokesperson for Wells Fargo declined to comment.Deutsche Bank ignored the suggestion, according to Morgan, the Preston Hollow spokesman. But he said the Dallas lender is concerned about the effect the “extreme economic pressure” applied by Nuveen could have in the future. “We are thankful for Deutsche Bank’s willingness to stand up to Nuveen’s pressure and hope it will continue to do so in the future,” Morgan said.Can’t Do BothThe transcripts show that Deutsche Bank wasn’t the only one to face such hardball tactics. Miller told Deutsche Bank he had commitments from Bank of America, Goldman Sachs Group Inc. and JPMorgan Chase & Co. and was soon meeting with Citigroup Inc. about not working with Preston Hollow. An agreement with Morgan Stanley, he said, was pending and similar deals were in the works with “a whole bunch” of smaller, region-based underwriters.Morgan Stanley didn’t stop doing business with Preston Hollow following conversations with Nuveen, said Mark Lake, a spokesman. Spokespeople at Bank of America, Citigroup, Goldman Sachs and JPMorgan declined to comment.“The Street just has to choose,” Miller said in a call with Goldman Sachs, according to a court transcript. “They have to choose who and what type of business they’re going to do because they’re not going to do both. At least not with Nuveen.”“I’ve got 90% of the major top bracket muni broker dealer firms and banks to say absolutely never again, and I’m working on 100%,” Miller told Deutsche Bank. “I feel my chances are very good at getting there.”\--With assistance from Jef Feeley.To contact the reporter on this story: Martin Z. Braun in New York at mbraun6@bloomberg.netTo contact the editors responsible for this story: Elizabeth Campbell at ecampbell14@bloomberg.net, William SelwayFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Financial Times•5 days ago
N26 comes of age
Europe’s most valuable fintech, N26, has unwittingly joined the big boys. The $3.5bn German online bank announced Wednesday that it has raised $470m in its Series D round to “drive expansion in Europe, ...
- Bloomberg•5 days ago
Deutsche Bank Considers Subletting Zig Zag Offices in London
(Bloomberg) -- Deutsche Bank AG is considering subletting the London offices occupied by its wealth management business and its asset-management arm DWS Group, according to people with knowledge of the matter.The bank has discussed the possibility of moving staff out of the Zig Zag building near Westminster Cathedral, though no decision has been made, said the people, who asked not to be identified because the deliberations are private. Deutsche Bank signed a 15-year lease for the property with Land Securities Group Plc and started moving employees in two years ago. Property Week reported the news earlier.Respresentatives of Deutsche Bank and DWS declined to comment.The German lender is planning to eliminate about 18,000 jobs globally under a restructuring plan announced this month by Chief Executive Officer Christian Sewing. While much of the layoffs are in the investment bank, the asset management unit under CEO Asoka Woehrmann has accelerated cost cuts amid industrywide pressure on fees and has also been reducing staff.The bank has separately signed an agreement with LandSec to move its U.K. headquarters to a building being constructed at 21 Moorfields in the City of London financial district on a 25-year lease. The project won planning approval last year. The new property will have space equivalent to about 10 soccer fields and is expected to be completed in 2021.(Updates with details of cost cuts in fourth paragraph.)\--With assistance from Suzy Waite and Nicholas Comfort.To contact the reporter on this story: Jack Sidders in London at jsidders@bloomberg.netTo contact the editors responsible for this story: Shelley Robinson at ssmith118@bloomberg.net, Patrick Henry, Christian BaumgaertelFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg•5 days ago
Deutsche Bank Still Faces an $83 Billion Question
(Bloomberg Opinion) -- The radical restructuring of Deutsche Bank AG unveiled at the start of July will be a monumental task for the lender’s senior managers. The job of the European Central Bank’s finance industry supervisors, who have to make sure the revamp goes smoothly, won’t be easy either.Deustche’s plan is a last-ditch attempt to make sure the troubled bank avoids more serious problems in the future. The ECB will need to use its regulatory stick and carrot wisely. This means standing by the lender in its sensible efforts to downsize, but being ready to demand more capital if the attempt doesn’t go according to schedule.Andrea Enria, head of the Single Supervisory Mechanism (the ECB’s banking supervisory body), dodged a bullet in April when Deutsche and its domestic rival Commerzbank AG decided not to merge. The combination would have created a mega-lender that was too big to fail and one that had little credible prospect of shrinking any time soon. The collapse of the talks left Deutsche’s executives with little alternative but to scale down on their own, which was always the best route.So far the supervisors have been supportive of the bank’s restructuring. Deutsche will target a core capital ratio (CET1) of 12.5%, which is above its minimum level of 11.8% but below the 13.7% in the fist-quarter and a previous full-year target of higher than 13%. This concession means the lender won’t have to raise extra capital on the market, a boon for its shareholders. The message from the ECB seems to be that so long as the bank is willing to address its problems and become less risky, the supervisors will support it.Such leniency makes sense but it cannot last forever. Deutsche’s strategy involves several uncertain steps, including the creation of a “bad bank” to hold 74 billion euros ($83.2 billion) of risk-weighted assets. This move accompanies the courageous decision to shut down Deutsche’s equity trading and sales business, which became a liability as the lender tried unsuccessfully to compete with Wall Street’s giants. Some of these assets will have to be sold and the central question for supervisors is what price Germany’s largest bank will be able to command. Should it be too low, this might create a capital hole.This issue is acute because Deutsche will start from a position of weakness in any sale negotiations. Some of the assets are illiquid and there may not be many buyers queuing up for them. Deutsche’s bargaining power will be weakened further because potential purchasers know it’s under pressure to sell.The unwinding of Deutsche’s equity business could bring to the fore a controversy that has long tormented the SSM. Some – notably the Bank of Italy – have argued that the illiquid assets sitting on the balance sheets of large lenders like Deutsche are a far bigger problem than the ECB has dared acknowledge. The central bank has always insisted supervision has been adequate and that there’s been no special treatment for certain countries or lenders.Supervisors certainly can’t afford for this restructuring to go wrong. In 2016 the International Monetary Fund singled out Deutsche as “the most important net contributor to systemic risks” to the global financial system. For now the German lender appears to have enough capital and plenty of liquidity, although its profitability has been poor. In the absence of a convincing turnaround, the ECB may face uglier questions in the future, including whether Berlin should be allowed to rescue the bank. While the EU has vowed to ensure that any bank can be wound down safely, this is untested in the case of mega-banks such as Deutsche.Enria’s legacy at the helm of the SSM will hinge on how well he oversees Deutsche’s reset. For the sake of the EU’s financial stability, one hopes he gets it right.To contact the author of this story: Ferdinando Giugliano at fgiugliano@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Ferdinando Giugliano writes columns on European economics for Bloomberg Opinion. He is also an economics columnist for La Repubblica and was a member of the editorial board of the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Reuters•6 days ago
New man on the board to clean up Deutsche Bank's act
The Qatari-backed lawyer tasked with trying to draw a line under Deutsche Bank's regulatory scandals has risen rapidly at the German bank, jumping to the management board after three years as a "sparring partner" on the bank's supervisory body. Deutsche Bank is desperate to clean up its act and restore its reputation after years of turmoil including the Libor rate-rigging scandal and money-laundering investigations, and Stefan Simon has an intimate knowledge of the bank's rocky relationships with regulators and courts. The enigmatic corporate lawyer will soon be sitting on Deutsche's management board, promoted from its external oversight board as part of a 7.4 billion euro ($8.3 billion) overhaul which will see the bank shrink and lose 18,000 jobs.
- Bloomberg•6 days ago
BNP Could Rise as Top Prime Broker in Asia on Deutsche Bank Deal
(Bloomberg) -- As Deutsche Bank AG and BNP Paribas SA sort out a deal on servicing the German lender’s hedge-fund clients, one of the prizes at stake is the Asian business.Even after a tough few years for Deutsche Bank, 14% of funds in the region still use it as either a prime broker or trade through it, according to Eurekahedge analyst Mohammad Hassan. That gives BNP the opportunity to break into the top 10, he said. Eurekahedge’s rankings reflect its estimates of both client balances and number of fund mandates.Still, BNP would need to halt client exits and contend with a unit that has taken on a multitude of smaller funds as bigger ones reduced their business or defected. This at a time when many banks are gravitating toward larger, more profitable clients in a business that ties up capital.Read more: Deutsche Bank, BNP Face Reality of $168 Billion Hedge-Fund DealThe German bank’s regional hedge-fund clients have slipped by almost one-quarter to 132 since 2010, a survey by trade journal AsiaHedge showed in May. It ranked as the fifth-largest prime broker in Asia.Deutsche Bank was known to be more welcoming to smaller outfits in the region. About 56% of smaller funds used it as either a prime broker or to execute trades, according to Eurekahedge, which estimates that two-thirds of Asia-focused hedge funds oversee less than $100 million.The German bank and Credit Suisse Group AG had previously benefited in the region as hedge funds added European banks as prime brokers to avoid being caught up in another U.S. bank failure after the collapse of Lehman Brothers Holdings Inc. Globally, Deutsche Bank didn’t rank among the top seven prime brokers in 2018, according to data from Coalition Development Ltd.Prime-brokerage divisions cater specifically to hedge funds, lending them cash and securities and clearing their trades.Deutsche Bank’s high-profile clients in Asia have included Carl Huttenlocher’s Myriad Asset Management Ltd. and Kontiki Capital Management (HK) Ltd., led by ex-Ziff Brothers Investments LLC Asia head Gregard Heje.BNP spokesman Andrew Achimu and Deutsche Bank spokeswoman Karene Dufour declined to comment.Its global business has enabled Deutsche Bank to trade fixed-income and currencies, on top of equities, a rarity among peers in Asia. It can also source harder-to-find securities for funds to borrow for bearish bets, even in Southeast Asia, said two fund executives who still list Deutsche Bank as their prime brokers. It’s also got an efficient electronic trading system and can supply financing at reasonable prices, they said, asking not to be identified as they aren’t authorized to speak publicly.Smaller FirmsThe bank has also courted China-focused managers. It counts Tairen Capital Ltd. as a client and has won over Chinese quantitative asset management firms expanding offshore after a regulatory crackdown on stock futures trading domestically.Servicing smaller outfits can earn goodwill, and a chunk of business, as a client thrives. But it can also make business more costly and less profitable, at least in the short term, because not every small manager will succeed.Deutsche Bank’s exit would hit such funds hardest. The AsiaHedge survey estimated there were about 30 regional funds that used the German bank as their sole prime broker.BNP, meanwhile, is largely a niche bank, strong in certain areas but lacking Deutsche Bank’s breadth and depth. While a deal could jump-start its Asia business, it will have to invest heavily and its success will also hinge on what technology, staff and clients are eventually transferred across.(Updates with AsiaHedge estimate in 12th paragraph.)To contact the reporter on this story: Bei Hu in Hong Kong at bhu5@bloomberg.netTo contact the editors responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net, Candice Zachariahs, Christian BaumgaertelFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Financial Times•6 days ago
Further reading
Elsewhere on Wednesday, -- ESG investing. -- Regulators fear Libra. -- Assange’s embassy command post. More from the Financial Times Time for ECB to admit its existing policy arsenal is exhausted Further ...
- Financial Times•6 days ago
Goldman’s pipeline of advisory business is climbing. What that means for its rivals is a question on DD’s mind
Both Goldman Sachs and JPMorgan Chase showed declining investment banking revenue in the second quarter of 2019, with both suffering a dip in their lucrative debt underwriting businesses. How do I go about getting into the investment banking industry? JPMorgan’s M&A business suffered a sharper 16 per cent year-on-year contraction — it generated $525m in fees — as Goldman was off just 3 per cent from the previous year at $776m.
- Financial Times•6 days ago
The lawyer thrust into the front line of Deutsche Bank clean-up
Until three years ago, Mr Simon was a successful German corporate lawyer working in the sleepy Rhineland town of Bonn and teaching law at the University of Cologne. In 2016, Qatar’s al-Thani royal family and Deutsche’s largest investor, suggested that Mr Simon should join the lender as a supervisory board member. Mr Simon’s latest career move is a rare step in corporate Germany and raised eyebrows among corporate governance experts.
- Barrons.com•7 days ago
Global Macro Hedge Funds Struggle to Regain Top Form
Eurekahedge’s Macro Hedge Fund index, a weighted index of 193 funds, fell 2.6% in 2018, the first negative annual return since the index began at the turn of the millennium. Some of the industry’s best-known names are feeling the pinch.
- Bloomberg•7 days ago
Deutsche Bank, BNP Face Reality of $168 Billion Hedge-Fund Deal
(Bloomberg) -- When Deutsche Bank AG said it was exiting the business of servicing hedge funds as part of its historic retreat, French rival BNP Paribas SA seemed poised to benefit. The reality is more complicated.The two European banking giants are discussing how to transfer 150 billion euros ($168 billion) of balances linked to hedge funds at Deutsche Bank’s so-called prime-brokerage unit along with technology and potentially hundreds of staff, people familiar with the matter said. Yet the German lender’s clients have been pulling about $1 billion of funds per day and going elsewhere as the firms iron out the details, placing pressure on them to complete a deal soon, said the people, who requested anonymity as the talks aren’t public.Deutsche Bank Chief Executive Officer Christian Sewing is pulling back from catering to risky hedge-fund clients as he attempts to radically overhaul the troubled German lender while BNP counterpart Jean-Laurent Bonnafe wants to expand in the industry. A deal of this magnitude would be a stark example of the German firm’s retreat from global investment banking while potentially transforming its French rival from a small player in the so-called prime-brokerage industry to one of Europe’s biggest.Institutional ClientsRupert Trefgarne, a spokesman for Deutsche Bank, declined to comment. Alexandra Umpleby, a spokeswoman for BNP in London, said the bank “remains committed to growing its institutional client platform globally, including strengthening prime finance and electronic equities capabilities.” She declined elaborate on how much in client balances the French bank wants to acquire.BNP is providing “continuity of service” to Deutsche Bank’s prime-brokerage and electronic-equity clients as the two companies discuss transferring over technology and staff, according to a July 7 statement. The ultimate goal of the talks is for BNP to take over the vast majority of client balances, which are slightly less than $200 billion currently, the people said.Complex DealThe final shape of the deal remains unclear and faces a multitude of complexities, including departing clients. BNP executives are meeting with U.S. hedge-fund clients this week to convince them to stay following similar sit-downs with European funds last week, the people said.If hedge funds keep moving their business elsewhere, officials at the German bank may just relegate its assets tied to the prime finance division into the newly formed Capital Release Unit, one of the people said. That unit is winding down unwanted assets totaling 288 billion euros ($324 billion) of leverage exposure, and the prime brokerage is responsible for much of the 170 billion euros of leverage exposure that’s coming from the equities division into the division, also known as CRU, a presentation shows.Prime-brokerage divisions cater specifically to hedge funds, lending them cash and securities and executing their trades, and the relationships can be vital for investment banks. The prime business generated about $18.3 billion in fees in 2018 industrywide, about the same as revenue from trading corporate debt and currencies combined, data from Coalition Development Ltd. show.Deutsche Bank, which became a force on Wall Street in the wake of the financial crisis, has struggled to keep hedge-fund clients in recent years as it lurched from one problem to another. U.S. rivals JPMorgan Chase & Co., Morgan Stanley and Goldman Sachs Group Inc. are the top three firms in the business, while Deutsche Bank wasn’t among the top seven prime brokers in 2018, Coalition data show.BNP, based in Paris, has sought to profit from crisis before. The lender bought Bank of America Corp.’s prime-brokerage business in June 2008 as the credit crunch raged, acquiring more than 500 clients and 300 employees. Still, the firm has one of the smallest prime units among global banks, according to Coalition.Deutsche Bank’s hedge fund balances have been declining throughout the year as speculation swirled around Sewing’s intentions for the prime brokerage. One major client -- Renaissance Technologies -- has been pulling money from the firm for the last few months, people familiar with the matter said earlier this month.\--With assistance from Nishant Kumar.To contact the reporters on this story: Donal Griffin in London at dgriffin10@bloomberg.net;Sonali Basak in New York at sbasak7@bloomberg.netTo contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Sree Vidya BhaktavatsalamFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- MarketWatch•7 days ago
Capital Confidential: Whispers from U.K. business and politics
Welcome to Capital Confidential—a weekly diary column featuring the best tidbits from around the U.K.’s business and political landscape from MarketWatch sister publication Financial News.
- Financial Times•7 days ago
Deutsche woos 13 wealth bankers from Credit Suisse
The move comes after the appointment of Claudio de Sanctis, who joined Deutsche Bank Wealth Management as its new head of Europe last year from Credit Suisse. It follows the move of two other senior Credit Suisse bankers in London to Deutsche in June.
- South China Morning Post•8 days ago
Deutsche Bank overhaul could see new investments, hiring in Asian operations, APAC chief executive says
Deutsche Bank is cutting 18,000 jobs and shuttering its equity sales and trading business worldwide as part of a massive restructuring after years of struggling with profitability, but Werner Steinmueller sees opportunity in the upheaval.The bank's Asia-Pacific chief executive said the capital released by closing the equity trading operations will allow the company to reinvest in its Asian business, expand its corporate bank in parts of the region and add jobs in its wealth management business " its fastest growing business in Asia.Steinmueller declined to discuss how many people will lose their jobs in Asia as a result of the overhaul, but said the effect of withdrawing from the equity business in the region will be "minimal".The company employed 19,732 people at the end of 2018 in the Asia-Pacific region, with about two thirds working in back office and support functions in India and the Philippines that serve the business globally. Following the restructuring, Deutsche Bank will employ about 74,000 people worldwide in 2022."I'm getting more investments," Steinmueller told the South China Morning Post. "Number one [is] in the corporate bank. We already started, but with the new strategy, we are accelerating investments in China and Australia for example, as well as in technology. We want to expand our range of transaction banking services in Australia, such as cash management." Deutsche Bank revamp to cost US$8.3 billion and 18,000 jobsSewing is the bank's fourth person to hold the CEO title in the past five years as the bank has been hit with years of losses and repeated debate over its direction. The troubled bank reported its first full-year profit since 2014 last year, but has struggled to achieve the level of returns of its American rivals.Before the latest restructuring effort, Deutsche Bank considered a merger with German rival, Commerzbank, but that proved to be unpopular with shareholders and merger talks ultimately fell apart in April.Sewing described the latest overhaul as a "fundamental rebuilding" of the bank and a return to its roots."This is a rebuilding which, in a way, also takes us back to our roots. We are creating a bank that will be more profitable, leaner, more innovative and more resilient," Sewing said in a message to employers posted on the bank's website. "It is about once again putting the needs of our clients at the centre of what we do " and finally delivering returns for our shareholders again."Deutsche Bank has declined to provide a regional breakdown of the potential job losses, but the bulk of cuts from the closure of equity trading business are expected in New York and London, where the company has larger trading operations.As part of that effort, the company said it would create a new division that combines its global transaction bank and its German commercial banking business, known as the corporate bank."Cutting back volatile, capital-intensive and underperforming sales and trading activities, and further reducing the cost base should improve profitability and strengthen leverage, but execution risks are high," Fitch Ratings said in a note. "The outlook is evolving, indicating that the rating could move in either direction over a one-to-two-year horizon."Fitch said the bank could see its BBB rating upgraded if it makes significant progress in refocusing on activities with a better risk-return profile and capital usage and sees stronger returns from its core commercial banking, private banking, asset management and smaller investment banking businesses." Laid-off expat bankers struggle to find new jobs in Hong KongSteinmueller said Deutsche Bank is "performing well" in Asia and intends to allocate resources to markets and business lines where it is strong, including making a bet on the future potential of the Asian market."Asia Pacific is a market for investment for the bank," Steinmueller said. "The APAC franchise has a good performance. In nearly all products, we had revenue increases and profitability in the first quarter. In fact, it was a record result for many years. So we are a growth area and getting the investments."Steinmueller said that the corporate banking business and fixed income have been key revenue drivers for the bank and it is seeing close to a double-digit growth rate in its wealth management business.The investment will come in the form of technology investments and expansion in new markets, such as Australia where Deutsche Bank has a minimal corporate banking operation and sees the potential for expansion, Steinmueller said."Coming to the investments, it is going, of course, in fixed income. Our strength is undoubtedly on the lending side, structured lending, global credit, and distressed loans," Steinmueller said. "On the transaction banking side, we are investing in people and markets, such as to serve our multinational clients on the subsidiary side, which today, we are not able to do. [We are making] people investments on the wealth management side. This is key in order to continue to grow this business." Trade war to boost German firms in China, says Deutsche Bank's Asia chiefSteinmueller said that China and India are very important markets for the bank going forward."We want to grow substantially our China business, so about 10 per cent of revenue growth every year. Onshore, we are fully licensed. We have a full product range. In transaction banking, where we are very strong in China, with both inbound and outbound business," Steinmueller said, "it means that we are dealing with both multinational clients with operations in China, and large Chinese corporates wanting to expand offshore."Deutsche Bank acted as a financial adviser on Ant Financial's US$14 billion private placement in June 2018, advised BMW on taking a 75 per cent stake in its joint venture in October and was a sponsor on Tencent Music Entertainment Group's US$1.1 billion initial public offering in the US in December.Steinmueller said that 88 of the company's top 100 clients, including European and American companies, use Deutsche Bank in the region."We make 70 per cent of our revenues outside of Germany and Asia plays a key role there," he said.Steinmueller said the company is closely watching the opening up of the financial services industry in China, including the potential to take 100 per cent stakes in joint ventures in the next few years."We are following this development very carefully," he said. "If we can do it and it fits in our business model, we will consider this option."This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
- Financial Times•8 days ago
Note to banks — you won’t get Deutsche’s capital dispensation
a week ago, there was a lot of big news to grasp: the 18,000 job cuts, the closure of the equities business, a seesawing share price as investors first welcomed the new strategy — then appeared to spot holes in it. One element has got relatively little attention, though: the regulatory dispensation granted Deutsche to lower its equity capital ratio for a period.
- Benzinga•10 days ago
Barron's Picks And Pans: Dollar Tree, Expedia, Nvidia, Prudential And More
This weekend's Barron's presents the 2019 Midyear Roundtable commentary and stock picks. Specific roundtable picks include a leading dollar store operator and the inventor of graphics processing units. ...
- Barrons.com•10 days ago
5 Brokerage Stocks That Could Benefit From the Deutsche Bank Debacle
The giant bank can no longer make money executing stock trades for professional money managers. It’s a sign the business of Wall Street has changed. So who wins in the aftermath?
- MarketWatch•11 days ago
Banking expert from 2008 crisis says low interest rates make banks vulnerable and Americans poorer
The Fed is listening only to financial markets, Karen Shaw Petrou says, not a generation of Americans whose long-term savings potential has been ‘eviscerated’
