All you have ever wanted to know about Deutsche Bank

Deutsche Bank AG (literally "German Bank") is a global banking and financial services company with its headquarters in the Deutsche Bank Twin Towers in Frankfurt, Hesse, Germany. It employs more than 100,000 people in over 70 countries, and has a large presence in Europe, the Americas, Asia-Pacific and the emerging markets. In 2009, Deutsche Bank was the largest foreign exchange dealer in the world with a market share of 21 percent.
Deutsche Bank has offices in major financial centres including London, Madrid, Frankfurt, New York, Paris, Moscow, Amsterdam, Dublin, George Town, Cayman Islands, Toronto, Kuala Lumpur, São Paulo, Singapore, Hong Kong, Tokyo, Sydney, Dubai, Riyadh, Mumbai, Bangkok and Belgrade.

History

1870-1919

Deutsche Bank was founded in Berlin in 1870 as a specialist bank for foreign trade. The bank's statute was adopted on 22 January 1870, and on 10 March 1870 the Prussian government granted it a banking license. The statute laid great stress on foreign business: "The object of the company is to transact banking business of all kinds, in particular to promote and facilitate trade relations between Germany, other European countries and overseas markets.

The bank's first domestic branches, inaugurated in 1871 and 1872, were opened in Bremenand Hamburg. Its first foray overseas came shortly afterwards, in Shanghai (1872) and London (1873). Already, at this early stage, the bank was looking further afield, making investments in North and South America, Asia, and Turkey.

Major projects in the early years of the bank included the Northern Pacific Railroad in the US[ and the Baghdad Railway (1888). In Germany, the bank was instrumental in the financing of bond offerings of steel company Krupp (1879) and introduced the chemical company Bayer to the Berlin stock market.

Deutsche Bank's early decades were a period of rapid expansion. Issuing business began to grow in importance in the 1880s, and in the 1890s it really took off. The bank played a major part in the development of Germany's electrical-engineering industry, but it also gained a strong foothold in iron and steel. A solid base in Germany permitted the financing of business abroad, which in some cases kept the bank occupied for years, the best-known example being the Baghdad Railway.

The second half of the 1890s saw the beginning of a new period of expansion at Deutsche Bank. The bank formed alliances with large regional banks, giving itself an entrée into Germany's main industrial regions. Joint ventures were symptomatic of the concentration then under way in the German banking industry. For Deutsche Bank, domestic branches of its own were still something of a rarity at the time; the Frankfurt branch dated from 1886 and the Munich branch from 1892, while further branches were established in Dresden and Leipzig in 1901.

In addition, the bank rapidly perceived the value of specialist institutions for the promotion of foreign business. Gentle pressure from the Foreign Ministry played a part in the establishment of Deutsche Ueberseeische Bank in 1886 and the stake taken in the newly established Deutsch-Asiatische Bank three years later, but the success of those companies in showed that their existence made sound commercial sense.

When in spring 1914 the "Frankfurter Zeitung" told its readers that Deutsche Bank was "the biggest bank in the world",Frankfurter Zeitung, Erstes Morgenblatt, 5 March 1914. The claim marked the highpoint but at the same time the end of an era. During World War I, the source of the visionary vigor that had driven many a determined company to succeed gradually dried up.

1919-1933

The immediate postwar period was a time of liquidations. Having already lost most of its foreign assets, Deutsche Bank was obliged to sell other holdings. A great deal of energy went into shoring up what had been achieved. But there was new business, too, some of which was to have an impact for a long time to come. The bank played a significant role in the establishment of the film production company, UFA, and the merger of Daimler and Benz.

The bank merged with other local banks in 1929 to create Deutsche Bank und DiscontoGesellschaft, at that point the biggest ever merger in German banking history. Increasing costs were one reason for the merger. Another was the trend towards concentration throughout the industry in the 1920s. The merger came at just the right time to help counteract the emerging world economic and banking crisis. In 1937, the company name changed back to Deutsche Bank.

The crisis was, in terms of its political impact, the most disastrous economic event of the century. The shortage of liquidity that paralyzed the banks was fuelled by a combination of short-term foreign debt and borrowers no longer able to pay their debts, while the inflexibility of the state exacerbated the situation. For German banks, the crisis in the industry was a watershed. A return to circumstances that might in some ways have been considered reminiscent of the "golden age" before World War I was ruled out for many years.

Deutsche Bank was one of the major drivers of the collateralized debt obligation (CDO) market during the housing credit bubble from 2004–2008, creating ~$32,000,000,000 worth. The 2011 US Senate Permanent Select Committee on Investigations report on Wall Street and the Financial Crisis analyzed Deutsche Bank as a 'case study' of investment banking involvement in the mortgage bubble, CDO market, credit crunch, and recession. It concluded that even as the market was collapsing in 2007, and its top global CDO trader was deriding the CDO market and betting against some of the mortgage bonds in its CDOs, Deutsche bank continued to churn out bad CDO products to investors.

The report focused on one CDO, Gemstone VII, made largely of mortgages from Long Beach, Fremont, and New Century, all notorious subprime lenders. Deutsche Bank put risky assets into the CDO, like ACE 2006-HE1 M10, which its own traders thought was a bad bond. It also put in some mortgage bonds that its own mortgage department had created but couldn't sell, from the DBALT 2006 series. The CDO was then aggressively marketed as a good product, with most of it being described as having A level ratings. By 2009 the entire CDO was almost worthless and the investors (including Deutsche Bank itself) had lost most of their money.

Gregg Lippman, head of global CDO trading, was betting against the CDO market, with approval of management, even as Deutsche was continuing to churn out product. He was a large character in Michael Lewis' "The Big Short", which detailed his efforts to find 'shorts' to buy Credit Default Swaps for the construction of Synthetic CDOs. He was one of the first traders to foresee the bubble in the CDO market as well as the tremendous potential that CDS offered in this. As portrayed in the book "The Big Short" of Michael Lewis, Lipmann in the mid of the CDO and MBS frenzy was orchestrating presentations to investors, demonstrating his bearish view of the market, offering them the idea to start buying CDS, especially to AIG in order to profit from the forthcoming collapse. As regards the Gemstone VII deal, even as Deutsche was creating and selling it to investors, Lippman emailed colleagues that it 'blew', and he called parts of it 'crap' and 'pigs' and advised some of his clients to bet against the mortgage securities it was made of. Lippman called the CDO market a 'ponzi scheme', but also tried to conceal some of his views from certain other parties because the bank was trying to sell the products he was calling 'crap'. Lippman's group made money off of these bets, even as Deutsche overall lost money on the CDO market.

Deutsche was also involved with Magnetar Capital in creating its first Orion CDO. Deutsche had its own group of bad CDOs called START. It worked with Elliot Advisers on one of them; Elliot bet against the CDO even as Deutsche sold parts of the CDO to investors as good investments. Deutsche also worked with John Paulson, of the Goldman Sachs Abacus CDO controversy, to create some START CDOs. Deutsche lost money on START, as it did on Gemstone.

Performance

Year	2011	2010	2009	2008	2007	2006	2005	2004	2003
Net Income	€4.3bn	€2.3bn	€5.0bn	€-3.9bn	€6.5bn	€6.1bn	€3.5bn	€2.5bn	€1.4bn
Revenues	€33.2bn	€28.6bn	€28.0bn	€13.5bn	€30.7bn	€28.5bn	€25.6bn	€21.9bn	€21.3bn
Return on Equity	-	5%	18%	-29%	30%	26%	16%	1%	7%
Dividend	-	0.75	0.75	0.5	4.5	4.0	2.5	1.7	1.5

Deutsche Bank has been transformed over the past five yearsmoving from a German-centric organisation that was renowned for its retail and commercial presence to a global investment bank that is less reliant on its traditional markets for its profitability.

The bank has been widely recognized for this change and was named International Financing Review's Bank of the Year twice in a three year period, in 2003 and 2005. It has also won the prize in 2010.

For the 2008 financial year, Deutsche Bank reported its first annual loss in five decades. despite receiving billions of dollars from its insurance arrangements with AIG, including US$11.8 billion from funds provided by US taxpayers to bail out AIG.

October 2011: Based on a preliminary estimation from the European Banking Authority (EBA), Deutsche Bank AG needs to raise capital about €1.2 billion (US$1.7 billion) as part of a required 9 percent core Tier 1 ratio after sovereign debt writedown starting in mid-2012.

Management structure

Until recently, there was no CEO at Deutsche Bank. The board was represented by a “speaker of the board.” Today, Deutsche Bank has a Management Board whose members are:

 Josef Ackermann (Chairman and CEO)

  Hugo Bänziger (Chief Risk Officer)

Anshu Jain (Corporate and Investment Banking)




Rainer Neske(Private  & Business Clients)

Hermann-Josef Lamberti (Chief Operating Officer)

Stefan Krause (Chief Financial Officer) 

The Group Executive Committee is the Management Board plus the heads of the bank’s other business areas, namely: Kevin Parker (Asset Management); and Pierre de Weck (Private Wealth Management).

The Supervisory Board of the bank is chaired by Clemens Börsig

Mission

We compete to be the leading global provider of financial solutions, creating lasting value for our clients, our shareholders, our people and the communities in which we operate.

Our mission gives our business a clear purpose and direction. It is rooted in our brand. Our brand captures and projects a clear idea of who we are.

It is something against which all our activities – products, services, behavior and communications – can be judged. It is simple, succinct and unequivocal.

Our claim has always been much more than a marketing slogan or advertising strapline. It defines our attitude and will continue to do so. It carries an inclusive proposition: performance represents all that we do for our clients, not just bottom-line results. Visually, we say it with more conviction, with more passion, in a new handwritten style.

Deutsche Bank’s mission statement is: “We compete to be the leading global provider of financial solutions, creating lasting value for our clients, our shareholders, our people and the communities in which we operate.” The bank’s business model rests on two pillars: the Corporate & Investment Bank (CIB) and Private Clients & Asset Management (PCAM).

Milestones

Deutsche Bank was founded in Berlin in 1870 as a specialist bank for foreign trade. The bank's statute was adopted on 22 January 1870, and on 10 March 1870 the Prussian government granted it a banking license. The statute laid great stress on foreign business: "The object of the company is to transact banking business of all kinds, in particular to promote and facilitate trade relations between Germany, other European countries and overseas markets."

The bank's first domestic branches, inaugurated in 1871 and 1872, were opened in Bremen and Hamburg. Its first foray overseas came shortly afterwards, in Shanghai (1872) and London (1873). Already, at this early stage, the bank was looking further afield, making invest ments in North and South America, Asia, and Turkey.

1905 – 06 Opening of branches in Nuremberg and Augsburg

1909 –10 Opening of branches in Istanbul and Brussels

1914        Merger with Bergisch Märkische Bank in Elber­feld and its branches in the Rhineland-Westpha­lia industrial region

1916        Participation in the Deutsche Ozean-Reederei and the Mitropa

1917     Merger with Schlesi-scher Bankverein and Norddeutsche Credit-anstalt

1920    Merger with Hannover­sche Bank, Braun-schweiger Privatbank and Privatbank zu Gotha

1923     Hyperinflation in Germany

1924 – 25  Merger with Württem­bergische Vereinsbank in Stuttgart and Essener Credit-Anstalt

1926    Participation in the founding of Lufthansa and in the merger of Daimler Motoren-Gesell­schaft, Stuttgart, with Benz & Cie., Mannheim, to form Daimler-Benz

1927    Merger with Lübecker Privatbank

1928    Merger with Hildesheimer Bank

1929    Merger of Deutsche Bank and Disconto-Ge­sellschaft; the company is now called 'Deutsche Bank und Disconto-Gesellschaft'

1931–32 following the banking crisis, Deutsche Bank und Disconto-Gesell­schaft has to deposit a third of its share capital with the state-owned Golddiskontbank

Awards

Euromoney - Private Banking and Wealth Management Survey 2011

The Corporate Division Private Wealth Management of Deutsche Bank was ranked #1 for Germany in 20 categories out of the 34 categories in this year's survey, including:
Best Private Bank
Range of investment products
Range of advisory services
Portfolio management equity
Portfolio management fixed income
Foreign exchange
Lending/Financing Solutions
Real estate investment
Private equity investment
Family office services
Inheritance and succession planning
Specialized services for Entrepreneurs
Philanthropy services

Risk magazine - Risk Awards 2011

Derivatives House of the Year - the third time since 2003
Bank Risk Manager of the Year
Derivatives Research House of the Year
Hedge Fund Derivatives House of the Year
Inflation Derivatives House of the Year

The Asset - Triple A Regional Awards 2010

Best Equity Deal - AIA
Best IPO - AIA
Best Sovereign Bond - ROP
Best Bank Capital Bond
Best Cross-border M&A

IFR - Awards 2010

Bank of the Year
Derivatives House
SSAR Bond House
EMEA High-Yield Bond House
Latin America Bond House
EMEA Equity House
Commodity Derivatives House

June 2012

Cannes Lions 2012

Cannes Lions – Gold Design Lion in the category “Environmental Design /
Exhibitions & Live Events” for the Anamorphic Mirror

Cannes Lions – Silver Design Lion in the category “Environmental Design /
Exhibitions & Live Events”

May 2012

The Asset – Triple A Awards 2012

Best Electronic Banking Solution in Thailand
Integrated Clearing Bank solutions for payments and collections – IATA Thailand (Role: Provider)

Best in Treasury and Working Capital – Best Multinational Corporation / Large Corporate Bank in Pakistan

Asiamoney – Best Domestic Bank Awards 2012

Best Domestic Equity House (The Philippines) – Deutsche Regis

April 2012

AsianInvestor – Investment Performance Awards 2012

Best ETF Provider for Asia Pacific (with db X-trackers ETFs, 3rd year running)

It's the 3rd consecutive year that Deutsche Bank receives this award, which reconfirms the success of Deutsche's platform year after year.

Deutsche Bank is one of the world’s largest ETF providers with more than US$40 billion in assets under management. With more than 240 ETFs in 10 stock exchanges globally on various asset classes including equities, fixed income, credit (long/short), money market, currencies and commodities, investors are able to implement a wide range of market strategies in a transparent, flexible and efficient manner.

The Asian Banker – Transaction Banking Awards 2012

Best Transaction Banking Product, Asia Pacific – FX4Cash
The Asian Banker Achievement Award for Euro Clearing, Asia Pacific

Financial-i – Leaders in Innovation Awards 2011

Leader in Innovation – Cash Management Provider, Asia

Décideurs – Leaders de la Finance 2012

Products

The bank offers financial products and services for corporate and institutional clients along with private and business clients. Services include sales, trading, research and origination of debt and equity; mergers and acquisitions (M&A); risk management products, such as derivatives, corporate finance, wealth management, retail banking, fund management, and transaction banking.

Corporate & Investment Bank

The Corporate & Investment Bank Group Division, or CIB, is responsible for Deutsche Bank’s capital markets business, comprising the origination, sales and trading of capital markets products including debt, equity, and other securities, together with our corporate advisory, corporate lending and transaction banking businesses. Our institutional clients come from both the public sector – for example, sovereign states and inter­national organizations – and the private sector. We serve the entire range of corporate clients, from medium-sized businesses to large multinational corporations.

CIB is subdivided into two Corporate Divisions: Corporate Banking & Securities and Global Transaction Banking.

Corporate Banking & Securities

Corporate Banking & Securities comprises our Markets and Corporate Finance businesses, and covers Deutsche Bank Group’s origination, sales and trading of securities, corporate advisory and M&A businesses worldwide, together with other corporate finance activities.

Welcome to Corporate Finance

As one of the world's leading investment banks, Deutsche Bank's Corporate Finance business provides the full range of integrated investment banking products and services for large-cap and mid-cap corporates, financial institutions, governments, government agencies, hedge funds and financial sponsors.

We recognise that selecting the right investment banking partner is critical - especially in these challenging times. Clients need banking partners who are able to offer stability, insights and global reach. Our relationships are enhanced by industry sector, country and regional expertise, closely aligned to high quality client solutions.

Our client offering includes comprehensive financial advisory - including both buyside and sellside Mergers & Acquisitions (M&A) and restructuring advisory - and capital raising services, underpinned by one of the world's largest and most successful debt and equity capital markets platforms, strong risk management and a global distribution network.

Global Transaction Banking

Global Transaction Banking covers Deutsche Bank’s cash management for corporate and financial institutions, trade finance business as well as trust & securities services

Cash Management & Trade Finance

Deutsche Bank’s Trade Finance and Cash Management teams provide commercial banking products and services - for both corporates and financial institutions - that deal with the management and processing of domestic and cross-border payments, professional risk mitigation for international trade and asset and liability management.

Our customers are supported in their domestic, regional and global trade finance and cash management programs through Deutsche Bank’s extensive global network of offices. These are situated in all major and secondary financial markets, including hubs in Frankfurt, London, New York and Singapore.

A complete range of robust and reliable solutions are available in Europe, the Americas and Asia Pacific, including:

db transaction solutions

db channel & information solutions

db liquidity management solutions

db financial supply chain solutions

db wholesale solutions

db trade solutions

db card solutions

Private Clients and Asset Management

The Private Clients and Asset Management Group Division, or PCAM, comprises Deutsche Bank’s invest­ment management business for both private and ins­ti­tu­tional clients, together with our tra­di­tional banking acti­vities for private individuals and small and medium-sized busines­ses. PCAM consists of two Corporate Divisions: Asset and Wealth Management and Private & Business Clients.

Asset and Wealth Management

Asset and Wealth Management comprises the Asset Management and Private Wealth Management Business Divisions.

Asset Management

Asset Management (AM) provides retail clients across the globe with mutual fund products through the DWS Investments franchise. It offers our institu­tional clients, including pension funds and insurance companies, a broad range of services from traditional to alternative investment products.
 

Private Wealth Management

Private Wealth Management (PWM) serves high and ultra high net worth individuals and families as well as selected institutions. It provides these very discerning clients with a fully integrated wealth management service, including inheritance planning and philanthropic advisory services.

Private & Business Clients

Private & Business Clients (PBC) provides a broad range of banking services including current accounts, deposits, loans, investment management and pension products, to private individuals and self-employed clients as well as small and medium-sized businesses. Outside of Germany, PBC has had longstanding operations in Italy, Spain, Belgium and Portugal and has been active in Poland for several years now. Further­more, PBC is also making focused investments in the growth markets of China and India.

Market share

Ordinary Share

Deutsche Bank’s share capital consists of common shares issued in registered form without par value. Under German law, each share represents an equal stake in the subscribed capital. Therefore, each share has a nominal value of € 2.56, derived by dividing the total amount of share capital by the number of shares.

Deutsche Bank shares are listed in Germany and in the U.S.A.

In May 1870 Deutsche Bank shares have been traded on the Berlin Stock Exchange for the first time, since December 8, 1880 the shares have been traded on the Frankfurt Stock Exchange.
On October 3, 2001 Deutsche Bank started trading its Global Registered Shares (GRS) on the New York Stock Exchange.    

Securities identification codes

Deutsche Börse

Type of issue	Registered Share
Symbol	DBK
WKN	514 000
ISIN	DE0005140008
Reuters	DBKGn.DE

New York Stock Exchange

Type of issue	GRS*
Currency	U.S.$
Symbol	DB
CINS	D 18190898
Bloomberg	DBK GR

* Global Registered Share

Overview 2012-2000

Date	Subscribed Capital	Number of Shares Issued	Market Capitalisation
June 30, 2012	EUR 2,379,519,078.40	929,499,640	EUR 26.5 bn
March 31, 2012	EUR 2,379,519,078.40	929,499,640	EUR 34.7 bn
December 31, 2011	EUR 2,379,519,078.40	929,499,640	EUR 27.4 bn
December 31, 2010	EUR 2,379,519,078.40	929,499,640	EUR 36.3 bn
October 6, 2010 capital increase completed 308.6m new reg shs issued more	EUR 2,379,519,078.40	929,499,640	EUR 38.2 bn
December 31, 2009	EUR 1,589,399,078.40	620,859,015	EUR 30.7 bn
December 31, 2008	EUR 1,461,399,078.40	570,859,015	EUR 15.9 bn
December 31, 2007	EUR 1,357,824,256.00	530,400,100	EUR 47.4 bn
December 31, 2006	EUR 1,343,406,103.04	524,768,009	EUR 53.2 bn
December 31, 2005	EUR 1,419,610,291.20	554,535,270	EUR 45.4 bn
December 31, 2004	EUR 1,392,266,869.76	543,854,246	EUR 35.5 bn
December 31, 2003	EUR 1,489,546,869.76	581,854,246	EUR 38.2 bn
December 31, 2002	EUR 1,591,946,869.00	621,854,246	EUR 27.3 bn
December 31, 2001	EUR 1,591,215,221.76	621,568,446	EUR 49.3 bn
December 31, 2000	EUR 1,578,275,957.76	616,514,046	EUR 55.2 bn

Branches

Deutsche Bank has offices in major financial centres including London, Madrid, Frankfurt, New York, Paris, Moscow, Amsterdam, Dublin, George Town, Cayman Islands, Toronto, Kuala Lumpur, São Paulo, Singapore, Hong Kong, Tokyo, Sydney, Dubai, Riyadh, Mumbai, Bangkok and Belgrade

       

Management structure and man power

Until recently[when?], there was no CEO at Deutsche Bank. The board was represented by a “speaker of the board.” Today[when?], Deutsche Bank has a Management Board whose members are: Josef Ackermann (Chairman and CEO); Hugo Bänziger (Chief Risk Officer); Anshu Jain (Corporate and Investment Banking); Jürgen Fitschen (Regional Management); Rainer Neske (Private & Business Clients); Hermann-Josef Lamberti (Chief Operating Officer) and Stefan Krause (Chief Financial Officer).

The Group Executive Committee is the Management Board plus the heads of the bank’s other business areas, namely: Kevin Parker (Asset Management); and Pierre de Weck (Private Wealth Management).

The Supervisory Board of the bank is chaired by Clemens Börsig.

It employs more than 100,000 people in over 70 countries, and has a large presence in Europe, the Americas, Asia-Pacific and the emerging markets. In 2009, Deutsche Bank was the largest foreign exchange dealer in the world with a market share of 21 percent  .

                                                                                                       

Financial Performance

Facts and Figures

The Group at a Glance	2011	2010
Share price at period end1	€ 29.44	€ 39.10
Share price high1	€ 48.70	€ 55.11
Share price low1	€ 20.79	€ 35.93
Basic earnings per share2	€ 4.45	€ 3.07
Diluted earnings per share2	€ 4.30	€ 2.92
Average shares outstanding, in m., basic2	928	753
Average shares outstanding, in m., diluted2	957	791
Return on average shareholders’ equity (post tax)	8.2 %	5.5 %
Pre-tax return on average shareholders’ equity	10.2 %	9.5 %
Pre-tax return on average active equity3	10.3 %	9.6 %
Book value per basic share outstanding	€ 58.11	€ 52.38
Cost/income ratio	78.2 %	81.6 %
Compensation ratio	39.5 %	44.4 %
Noncompensation ratio	38.7 %	37.3 %
	in € m.	in € m.
Total net revenues	33,228	28,567
Provision for credit losses	1,839	1,274
Total noninterest expenses	25,999	23,318
Income before income taxes	5,390	3,975
Net income	4,326	2,330
	Dec 31, 2011 in € bn.	Dec 31, 2010 in € bn.
Total assets	2,164	1,906
Shareholders’ equity	53.4	48.8
Core Tier 1 capital ratio4	9.5 %	8.7 %
Tier 1 capital ratio4	12.9 %	12.3 %
	Number	Number
Branches	3,078	3,083
thereof in Germany	2,039	2,087
Employees (full-time equivalent)5	100,996	102,062
thereof in Germany	47,323	49,265
Long-term rating
Moody’s Investors Service	Aa3	Aa3
Standard & Poor’s	A+	A+
Fitch Ratings	A+	AA-

SWOT Analysis

SWOT is an acronym for the internal strengths and weaknesses of a firm and the environmental opportunities  

and threats facing that firm. It is a technique through which managers create a quick overview of a companies strategic situation.