Author Topic: DB - Deutsche Bank AG  (Read 28884 times)

merkhet

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 2999
Re: DB - Deutsche Bank AG
« Reply #10 on: December 27, 2014, 03:27:59 PM »
I would separate out investment banks (GS) from banks that have deposits (BAC, WFC, JPM).


lathinker

  • Jr. Member
  • **
  • Posts: 72
Re: DB - Deutsche Bank AG
« Reply #11 on: December 28, 2014, 05:50:23 AM »
There were some reports recently that they are considering to adjust their strategy as the current one does not deliver the results they hoped for:

http://www.businessweek.com/news/2014-12-18/deutsche-bank-says-it-will-review-strategy-in-coming-year

Interesting enough, most reports suggest that theyy might consider selling Postbank, the most retail-oriented part of the DB-empire which apparently does not operate efficiently enough. Postbank's large deposit base does not seem to be of a great value to DB in the opinion of DB's management. DB may try to become more like UBS with a focus on asset & wealth management. However, they remain anchored strongly with corporate clients both of international character and in the "Mittelstand". They should also be able to make money by connecting these clients to capital markets, given they still have a fine investment banking operation.

Also, I remain hopeful that they will not have to raise additional capital. Most of the value destruction for shareholders in the past was done by diluton through capital increases.

IMHO, if they play their cards well, there should be significant upside from here.

ccplz

  • Sr. Member
  • ****
  • Posts: 253
Re: DB - Deutsche Bank AG
« Reply #12 on: December 28, 2014, 11:53:51 AM »
Quote
  I think the only investment bank where he bought the common shares was Wells Fargo coming out of 2008/09.

Wells Fargo is not an investment bank.

ItsAValueTrap

  • Hero Member
  • *****
  • Posts: 1945
    • Blog
Re: DB - Deutsche Bank AG
« Reply #13 on: December 28, 2014, 12:28:28 PM »
Quote
  I think the only investment bank where he bought the common shares was Wells Fargo coming out of 2008/09.

Wells Fargo is not an investment bank.

Ok... they are involved in a number of businesses including investment banking.
"It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price. " -Buffett

my blog

longlake95

  • Sr. Member
  • ****
  • Posts: 267
Re: DB - Deutsche Bank AG
« Reply #14 on: February 11, 2015, 09:40:46 AM »
Anyone doing any work on DB? Seems safe and cheap - a squarely out of favour. Just starting to read up on them.

LL

bbarberayr

  • Full Member
  • ***
  • Posts: 161
Re: DB - Deutsche Bank AG
« Reply #15 on: February 13, 2015, 08:56:15 AM »
I own it.  Their financials are quite complex, so it's a bit of a leap of faith, but I think it does well.

Basically, my thinking comes down to the fact that it is one of the cheapest Euro-financials on many metrics.  It has a reasonable dividend, meets the banking capitalization requirements and I have to believe management raised all the capital they need. Business show improvement due to a focus on cost cutting and reduced competition in investment banking, plus an improving European economy.

lathinker

  • Jr. Member
  • **
  • Posts: 72
Re: DB - Deutsche Bank AG
« Reply #16 on: April 26, 2015, 08:21:54 AM »
Interesting days at Deutsche Bank.

They reported Q1 numbers today: https://www.db.com/medien/en/content/5060_5155.htm?kid=pr.inter_ghpen.headline

Also, on Friday, they preannounced some results of their strategic review: They are looking to deconsolidate Deutsche Postbank, a retail bank they bought a few years back. Also, they are looking to reduce leverage and RWA in their investment bank.
Full announcement and analyst call are to follow tomorrow.

lathinker

  • Jr. Member
  • **
  • Posts: 72
Re: DB - Deutsche Bank AG
« Reply #17 on: April 28, 2015, 05:44:16 AM »
Results of strategic review:

- Postbank to be taken over completely at first (currently DB owns 96-97%), then be sold entirely or via stock market. This implies a squeeze-out for Postbank which yesterday caused Postbank's share price to rise by ~14%.
- No other division to be given up. To the disappointment of many analysts, DB will keep its private customer section.
- Additional investments in transaction banking, asset and wealthmanagement and digital infrastructure.
- Reduction of leverage in corporate and investment bank by ~200 bn EUR.

Targets by 2020:
- CET1 ratio of 11% (currently 11.1%)
- Leverage ratio of 5% (currently 3.4%)
- RoE ambition of 10%+ (most recently 3%, prior ambition of 12%)
- Payout ratio of 50%

Now this is interesting. DB are already where they want to be in terms of CET1 ratio. Accordingly, they have no pressure to reduce their risk-weighted assets (RWA). Just the opposite, they can grow RWA along equity. At the same time, they still want to shrink their overall balance sheet to improve their leverage ratio. Accordingly, you can expect them to get rid of low-RWA positions (at least on the balance). That target pattern might boost their risk appetite and strengthen their (more RWA intensive) trading business.

Analysts were pretty annoyed by their new (lower) RoE ambition. I understand you want to have a higher RoE, but they may just be managing down expectations a bit after years of promising 15% or 12% and delivering 0%-6%. On the other hand, given they have RWA capacity, they might look into more profitable stuff. Also, year annualised RoE in Q1 was about 12%, so getting to 10% in the next five years does not appear overly aggressive.

On the other hand, if DB can do 10% regularly, the stock looks cheap: Their TBV per share is around 40 EUR, so if they earn 4 EUR per share and pay 2 EUR per share, a stock price of 30 EUR is rather on the cheap side, though not a screaming buy.



undervalued

  • Sr. Member
  • ****
  • Posts: 391
Re: DB - Deutsche Bank AG
« Reply #18 on: September 30, 2016, 11:50:05 AM »
I am surprise no one has been posting anything about DB since there are so many things going on with it. I am guessing everyone is running away from it?
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. - Will Rogers

TwoCitiesCapital

  • Hero Member
  • *****
  • Posts: 2287
Re: DB - Deutsche Bank AG
« Reply #19 on: September 30, 2016, 12:04:43 PM »
I am surprise no one has been posting anything about DB since there are so many things going on with it. I am guessing everyone is running away from it?

Pretty sure anyone who was looking at it before the last month probably feels burned by it by now and there's not much for those who didn't own it to say other than "thank goodness."

I sold puts on it, but that was more because vol premiums were exceptionally high. I was getting 6-10% of notional at risk to underwrite the the risk that the common wouldn't fall an additional 20+% in the next 6 weeks. Seemed reasonable since all of the recent panic really started with the settlement discussions and not any real questions related to liquidity and capitalization.