DEUTSCHE BANK

Deutsche Bank is a global Multinational Investment bank and financial services company headquartered in Frankfurt, Germany and dual-listed on the New York Stock Exchange and the Frankfurt Stock Exchange.

The bank has a long history dating back to 1870 when it was established as a specialist bank for financing foreign trade and promoting German exports. The bank went on to play a large part in developing Germany’s industry, as its business model focused on providing finance to industrial customers.

Prior to the founding of Deutsche Bank, German importers and exporters were dependent upon British and French banking institutions in the world markets—a serious handicap in that German bills were almost unknown in international commerce, generally disliked and subject to a higher rate of discount than English or French bills.

The bank merged with other local banks in 1929 to create Deutsche Bank und DiscontoGesellschaft. In 1937, the company name changed back to Deutsche Bank.

The bank grew its international portfolio in the 1970s when it forged ahead with international expansion, opening new offices in new locations, such as Milan (1977), Moscow, London, Paris and Tokyo. In the 1980s, this expansion continued when the bank paid U$603 million in 1986 to acquire Banca d’America e d’Italia.

In 2002, Deutsche Bank strengthened its U.S. presence when it purchased Scudder Investments. Meanwhile, in Europe, Deutsche Bank increased its private-banking business by acquiring Rued Blass & Cie (2002) and the Russian investment bank United Financial Group (2005).

Today, the bank’s network spans 58 countries with a large presence in Europe, the Americas and Asia. As such, Deutsche Bank is one of the nine Bulge Bracket banks and is the 17th largest bank in the world by value of total assets. As the largest German banking institution, it is a component of the DAX stock market index.

The company is a universal bank resting on three pillars – the Private & Commercial Bank, the Corporate & Investment Bank (CIB) and Asset Management (DWS). Its investment banking operations often command substantial deal flow and maintain different “sell side” and “buy side” departments.

Deutsche Bank is a leading Corporate Bank in Europe based in its largest economy with strong investment banking, private banking, wealth and asset management capabilities. As such, the company remains aligned with the strengths of the German economy around trade and investment which are at the centre of the company’s corporate, institutional and private clients’ needs.

In 2019 the company implemented a successful transformation strategy which included the exit and wind-down of non-strategic businesses and assets.

The bank then created four businesses, competing to win – a Corporate Bank, an Investment Bank, a Private Bank and Asset Management – and implemented new leadership teams across all businesses.

This transformation strategy resulted in a positive momentum, especially at the end of 2019. Fourth-quarter Core Bank revenues were 5.5 billion euros, up 5% year-on-year, or 8% adjusted for specific revenue items.

However, this momentum has been somewhat impacted by the onslaught of economic events surrounding the effects of the coronavirus pandemic.

The bank warned investors in late April of a 67% plunge in net income last quarter due to the coronavirus, although it expected to post a first-quarter profit, ahead of reporting its full earnings.

In the pre-release announcement, Deutsche Bank reported a fall in its Common Equity Tier 1 (CET1) ratio, a measure of a bank’s financial strength from a regulatory point of view, from 13.6% to 12.8% over the preceding three months.

However, it would seem that the measures taken during the bank’s transformation strategy in the previous year served to bolster it against the unprecedented effects of the coronavirus, placing the bank in a good position to mobilize its strong balance sheet against the negative impact of this unforeseen economic contraction.

As such, the decision to draw on its reserves caused the bank’s Common Equity Tier 1 ratio to dip below its target minimum of 12.5%, without weakening its balance sheet, at an average which is comfortably above its minimum requirement of 10.4%.

Deutsche Bank trades on the Frankfurt Stock Exchange where investors can buy shares under the stock symbol – DBK

Data from the company’s 2025 first quarter financial analysis shows adjusted profit before tax was up 13 % year-on-year to € 303 million.

Core Bank adjusted profit before tax was up 32 % to € 1.1 billion, driven by revenue growth and cost reduction.

As mentioned above, the bank reported a Common Equity Tier 1 (CET 1) capital ratio of 12.8%, approximately 240 basis points above current regulatory requirements, despite regulatory inflation, COVID-19 impacts and business growth.

Liquidity reserves remained strong at € 205 billion with a Liquidity Coverage Ratio of 133 %, € 43 billion above regulatory requirements.

Loans increased by € 25 billion, up 6 % in the quarter, with provision for credit losses of € 506 million, of which approximately 50 % were due to COVID-19.

The bank has also taken measures to counteract the effects of covid-19 in the economy, most notably by supporting over 5 200 clients applying for credit worth approximately € 4.4 billion, under the KfW-sponsored loan programme, and also earmarked € 20 billion for overall new credit extension to corporate clients.

This is a good strategic move as injecting liquidity into the German economy is set to allow for strong returns to the bank in the future, particularly as markets begin to reopen and the economy begins to function once again.

As such, it would appear that despite the impact of the coronavirus pandemic, the bank has managed to stay largely on track and deliver impressive growth against the backdrop of such unprecedented economic uncertainty.

In fact, the bank has continued with this transformation strategy throughout the pandemic, with 73 % of total anticipated transformation-related effects now absorbed.

This is largely attributable to the bank’s sound management plans and the momentum already gained from the transformation strategy implemented well before the unforeseen outbreak of the virus.

It would appear therefore that Deutsche Bank is set to deliver a sound performance going forward, and deliver solid long-term dividends and a strong share price for investors who choose to purchase shares today, securing a good buy-in in 2025 and in the future.

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• Can I buy Deutsche Bank shares in South Africa?
  Yes, you can.

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  By simply opening a free account on SA Shares, or by clicking the “Buy this Share” button to get started.

• What is the current share price?
  By clicking on the link provided above, you can view the real-time Deutsche Bank share price on the platform.

• Is Deutsche Bank  a good share to buy?
  Yes, Deutsche Bank shares are a good investment for those seeking long-term returns. The bank has benefited from its sound transformation strategy, implemented before the coronavirus pandemic, to deliver stable growth despite the unprecedented economic contraction. The bank is also working to extend its credit lines and thereby contribute to the growth of the German economy going forward. As most investors gain profit on longer held stocks, those who purchase Deutsche Bank shares will likely benefit from the post-Corona growth which the bank is set to deliver under its current crisis management strategy.

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