As per the media reports, Deutsche Bank may shut down its equity research, derivatives, sales trading and equity capital markets, barring its fixed income trading business. This was in lieu of many global structural changes to bolster its more profitable businesses and cut total costs by a quarter by 2022, which prompted many Australian Fund Managers to shift their operations to other broker houses. Jobs of more than 18k personnel worldwide are expected to be impacted by this development.
In the previous update, the bank announced the appointment of Jennifer Scott-Gray as a Head of Global Transactional Banking, Australia. She is an industry veteran with extensive experience in the area of trade finance and cash management. Jennifer served Westpac as a Global Head of Trade Finance Sales and worked in Treasury and Trade Services at Citibank between 2010 to 2014, and worked for BNY Mellon in Business Development & Marketing between 2005 to 2010. She pursued her Bachelor of Law and Bachelor of Arts degrees from the University of Sydney and the University of New England, respectively; and began her career as a Lawyer.
Deutsche Bank started its operations in Australia since 1973, with offices in Melbourne, Perth and Sydney. Its Sydney office is one of the four hubs in the Asia Pacific region, along with the Tokyo, Singapore and Hong Kong offices. The bank has been operating into various domains, such as Corporate Finance, Equities, Fixed Income and Currencies and Global Transaction Banking businesses, under Corporate & Investment Bank as a new division created in the year 2017. The main aim of the bank’s Australian business has been to align its products (focused resource allocation) and sales efforts to deliver better services to its clients.
Its corporate finance segment focuses on delivering the entire range of financial products and services to the bank’s corporate clients via its regional and industry-focused coverage teams, which comprises debt and equity capital markets and Mergers and Acquisitions (M&A) teams.
Under its equities segment, the bank provides its institutional, corporate and retail clients worldwide, a complete portfolio of equity and equity-linked products. The equities platform is built on four product lines, which are Equity Trading, Equity Derivatives, Global Investment Solutions and Prime Finance, to set the yardstick in trading, origination, financing and distribution.
Under its Fixed Income and Currencies segment, the bank brings together world-class research with trading, top-ranked institutional sales force, and structuring expertise across Rates, Foreign Exchange, Emerging Markets and Credit. This business segment enables the bank to respond to regulatory expectations, increasing automation and client demand for transparency and standardisation in execution across emerging markets, currency and fixed income.
Under its Global Capital Markets segment, the bank offers access for financial expertise and risk management solutions to its valuable clients. It includes Equity and Debt capital markets, the Financing and Solutions Group and Leveraged Debt Capital Markets. Global Capital Markets business involves working closely with the bank’s Institutional Client Group and Corporate Finance businesses.
Under its Global Transaction Banking, the bank provides top-class securities services, trade finance and cash management services along with delivering a full range of commercial banking products and services for both institutions and corporates globally.
Its asset management arm, DWS Group is one of the world’s leading asset managers. With more than 60 years of experience and a reputation for its operations in Germany and across the European continent, it is presently recognised as a trusted source for the full spectrum of investment disciplines (integrated investment solutions, stability and innovation) by its clients globally. The bank provides access for its robust investment capabilities across all important asset classes and solutions with high growth potential to its institutional clients and individuals. Its diverse expertise in Active, Passive and Alternatives asset management as well as deep environmental, social and governance focus complements each other while creating targeted solutions for its clients. Its strategic investment approach is driven by highly effective financial expertise of the bank’s research analysts and investment professionals and ‘on-the-ground’ knowledge of its economists together in one consistent global CIO View.
DWS with around 3,600 employees all over the world, wishes to revolutionize and model the future of investing. Its emphasis has always been on establishing highly effective global team. In Australia, DWS offers solutions and investment management capabilities, including Global Equities (passive, fundamental, systematic), Global Fixed Income (active and passive), Global and Australian Listed and Private Property, Listed and Private Infrastructure, and Multi-Asset.
Deutsche Bank Key Information (Source: Company Reports)
As per the income statement, the interest income for FY18 has been reported at EUR 24,793 Mn as compared to EUR 23,542 Mn in FY17. The total interest expense for FY18 was reported at EUR 11,601 Mn in FY18 as compared to EUR 11,164 Mn in FY17. The loan loss provision for FY18 was reported at EUR 525 Mn as compared to EUR 525 Mn in FY17. The net income before tax expense for FY18 was reported at EUR 1,330 Mn as compared to EUR 1,228 Mn in FY17. The net income after tax for FY18 amounted to EUR 341 Mn as compared to a loss of EUR 735 Mn in FY17.
Deutsche Bank Income Statement (Source: Company Reports)
As per the company balance sheet, the cash and due at the end of FY18 was reported at EUR 188,731 Mn in FY18 as compared to EUR 225,655 Mn in FY17. The net loans at the end of FY18 were amounted to EUR 400,297 Mn in FY18 as compared to EUR 401,699 Mn in FY17. The total assets at the end of FY18 were EUR 1,348,137 Mn as compared to EUR 1,474,732 Mn in FY17. The total liabilities at the end of FY18 was reported at EUR 1,280,968 Mn as compared to EUR 1,406,883 Mn in FY17. The total equity at the end of FY18 was reported at EUR 67,169 Mn as compared to EUR 67,849 in FY17.
On the stock information front, on July 5, 2019, the stock of Deutsche Bank AG on Borse Frankfurt Stock Exchange reported a close price of Euro 7.179, up 2.70%, with a market capitalisation of ~EUR 14.82 Bn. Its current PE multiple is at 18.60x and its last profit per share was noted at -0.01 Euro. Its annual dividend yield has been noted at 1.58%. It reached day’s high at EUR 7.365 and touched day’s low at EUR 6.97. Its 52 weeks high and low price stands at EUR 11.328 and EUR 5.807.
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