Author Topic: DB - Deutsche Bank AG  (Read 28891 times)

RuleNumberOne

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Re: DB - Deutsche Bank AG
« Reply #90 on: July 29, 2019, 09:42:55 AM »
1.3T in assets, 1.3B in net income, 16B in market cap.

The market seems to think DB is essentially bankrupt. Can the bears hope for a derivatives blowup here?

https://www.marketwatch.com/story/deutsche-bank-pegs-its-derivatives-exposure-at-about-22-billion-and-faces-challenges-in-shedding-those-assets-2019-07-26

"Deutsche Bank created over the years a whopping $53.5 trillion (€48 trillion) book of derivatives contracts that it now is seeking to unload, but experts say getting rid of those assets is no easy task.

The plan, as part of Deutsche Bank’s DBK, -0.63% biggest restructuring in decades, is to see its derivatives and other unwanted financial instruments that are now housed in its Capital Release Unit, or “bad bank,” be sold or wound down over time."


RuleNumberOne

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Re: DB - Deutsche Bank AG
« Reply #91 on: July 29, 2019, 09:44:20 AM »
https://www.reuters.com/article/us-deutsche-bank-derivatives-exclusive/exclusive-deutsche-banks-problem-derivatives-cloud-recovery-sources-idUSKCN1UI2TT

"It is doubtful that the bank would be able to sell the positions in their entirety without taking a large write-down requiring the bank to raise capital from shareholders, the three people said.

“They are not in a position to mark these things down and sell them off because they don’t have the capital to spare and it’s not clear where the next capital injection will come from,” said Ali Miremadi, portfolio manager at shareholder GAM. “Really, they have no choice but to sit there and wait for them to unwind.”"

SharperDingaan

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Re: DB - Deutsche Bank AG
« Reply #92 on: July 29, 2019, 11:47:58 AM »
Can you really see Deutsche Bundesbank allowing the DB restructuring to fail - simply because DB couldn't get rid of its long dated derivative book without bankrupting the bank? And if you were Deutsche Bundesbank, would you not demand an equity 'sweetener' for a mirror swap/repo that takes it off DB's hands?

50%-1 shares, as the 'starting' ask?
Opportunities.

SD




Spekulatius

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Re: DB - Deutsche Bank AG
« Reply #93 on: July 29, 2019, 03:40:43 PM »
Can you really see Deutsche Bundesbank allowing the DB restructuring to fail - simply because DB couldn't get rid of its long dated derivative book without bankrupting the bank? And if you were Deutsche Bundesbank, would you not demand an equity 'sweetener' for a mirror swap/repo that takes it off DB's hands?

50%-1 shares, as the 'starting' ask?
Opportunities.

SD

DB will Never fail - it would be nationalized. It wouldn’t be the first one either.
Life is too short for cheap beer and wine.

SharperDingaan

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Re: DB - Deutsche Bank AG
« Reply #94 on: July 29, 2019, 05:17:28 PM »
This is THE german bank ... so not good PR to actually nationalize.
Hence the 50% - 1 share. Not quite nationalization, as not quite majority owned; but a large enough minority interest to make it a de-facto nationalization. There's still a share price, set by the market every day, and everyone gets to suck and blow at the same time. Very European!

SD

Spekulatius

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Re: DB - Deutsche Bank AG
« Reply #95 on: July 29, 2019, 05:48:21 PM »
This is THE german bank ... so not good PR to actually nationalize.
Hence the 50% - 1 share. Not quite nationalization, as not quite majority owned; but a large enough minority interest to make it a de-facto nationalization. There's still a share price, set by the market every day, and everyone gets to suck and blow at the same time. Very European!

SD

i believe that if the German government , it will only do so if they effectively control the bank. I can Detroit you that there is very little love for the Deutsche Bank in the populace and the government. That why I believe that rescuing them without controlling or even nationalizing them wouldn’t fly. This is not the US, balancing with state owned banks is common and not a stigma. I think most customers  prefer to get the managers running place get kicked out.
Life is too short for cheap beer and wine.

SharperDingaan

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Re: DB - Deutsche Bank AG
« Reply #96 on: July 30, 2019, 05:54:39 AM »
This is THE german bank ... so not good PR to actually nationalize.
Hence the 50% - 1 share. Not quite nationalization, as not quite majority owned; but a large enough minority interest to make it a de-facto nationalization. There's still a share price, set by the market every day, and everyone gets to suck and blow at the same time. Very European!

SD

i believe that if the German government , it will only do so if they effectively control the bank. I can Detroit you that there is very little love for the Deutsche Bank in the populace and the government. That why I believe that rescuing them without controlling or even nationalizing them wouldn’t fly. This is not the US, balancing with state owned banks is common and not a stigma. I think most customers  prefer to get the managers running place get kicked out.

I hear you, but ....

Keep in mind that DB workers are represented on the Supervisory Board, and would also have (as german citizens) a 50%-1 vote on the Management Board (good for politicians getting re-elected). And for the Bundesbank to not get its way, every single opposing shareholder would have to vote together to achieve the 50%+1 majority rule; theoretically possible, but extremely unlikely. The Bundesbank will have de-facto nationalized DB, for 1/2 the cost. Very german.

The Bundesbank is also independent, and not subject to populist vote or government wishes; they only have to comply with their mandate. We both agree the Bundesbank wouldn't hesitate to nationalize, we just think that once it is done there will still be public shareholders, and shares trading on the various exchanges around the world.

SD

John Hjorth

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Re: DB - Deutsche Bank AG
« Reply #97 on: July 30, 2019, 06:29:07 AM »
Having worked there and having worked pretty closely with the new CEO and COO in the past I can only reiterate that the definition of stupidity is doing the same thing over and over and expecting a different result.  They are smart and capable but they are definitely not "shake up the institution", "do things differently", "take the bull by the horns" candidates.  They are status quo.  For that reason I can't imagine why the existing issues will go away, the direction will change or the results will be materially different.

I'm reposting this post by dwy000 by quoting here, to remind myself not to waste time looking at DB again. This situation is to me actually more scary than the existing dislocations in parts of the European bonds markets, which have caused CoBF being flooded with gloom & doom posts recently.
« Last Edit: July 30, 2019, 08:17:05 AM by John Hjorth »
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RuleNumberOne

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Re: DB - Deutsche Bank AG
« Reply #98 on: December 02, 2019, 07:57:45 AM »
Since the last comments on this thread, DB stock has gone lower. DB market cap $15 B.

Societe Generale, France's largest bank: market cap $27 B.

FT spends all its time bashing and blaming Trump for everything. How about looking into Europe's finances for a change? If investors want to read Trump-bashing, they can turn on CNN.