The mood seemed exuberant last week on the New York Stock Exchange. Either way, Deutsche Bank boss Christian Sewing apparently gave the bell, which traditionally ends on the New York Stock Exchange (NYSE), a hit so hard that it made his people happy. fellow board members. Supervisory board chairman Paul Achleitner, who also traveled to mark the bank’s 20th anniversary at the NYSE, posted the photo to the LinkedIn career network, where he recently shared his perspective, as d other big names in the German economy. “A highlight” was the performance, wrote Achleitner, who will step down next May after ten years, and a strong symbol of Deutsche Bank’s anchoring in the US economy.
His announcement earned him the applause of his colleagues who hailed the “milestone” in the history of Deutsche Bank. Achleitner did not mention that the Money House Wall Street excursion, which began in 1999 with the takeover of US investment bank Bankers Trust, ultimately burned billions of shareholders’ money, that is, Summa Summarum was anything but powerful. For inside investment bankers, who usually received bonuses even when business wasn’t doing so well, it was still worth it after all.
Things didn’t go so well on Wednesday either, at least on the stock market after Deutsche Bank released its quarterly figures. In the past three months, the bank has earned nearly 200 million euros, about seven percent more than in the same quarter a year earlier. It was therefore the fifth consecutive quarter with a profit. The bottom line, however, was that this only corresponded to a 1.5% return on equity, which is a far cry from the 8% CEO Christian Sewing is aiming for in 2022. At the same time, the banker appears to be a little more lax with costs.
Stable numbers, low shares
In any case, the bank’s share fell by more than six percent to around 11.10 euros. Stocks had risen in recent months, but not as strongly as stocks of other major banks. In particular, large investment houses such as Goldman Sachs or JP Morgan are currently benefiting massively from the post-corona economic recovery, cheap central bank money and government aid worth billions. for the real economy.
For Deutsche Bank, however, the investment banking boom appears to be slowing, which is mainly due to the focus on fluctuating bond transactions following the exit from the equity business. “The bank has so far failed to become more independent from the volatile investment bank,” said Benjardin Gärtner, head of equities at fund firm Union Investment. This will not change in the current interest rate environment. Competitors are better diversified in terms of their earning drivers.
If you believe the management, then there is no reason to doubt that the bank will be able to complete the renovation in 2022, which was announced in July 2019. All divisions have developed as expected or better Couture says at every opportunity – which is only true when you consider the many changes to the plan. Be that as it may, Deutsche Bank is far from being a wise entrepreneurial bank well anchored in its domestic market, but remains an investment bank that generates part of its income in exotic and risky markets. And the one in which powerful bankers in New York, London or elsewhere still have their say.
In order to find the biggest source of income from home money, you have to fly thousands of miles by plane from Frankfurt to Southeast Asia, as the Bloomberg news agency researched. You will find your happiness on the 18th floor of an office tower overlooking Marina Bay in Singapore. There, Chetankumar Shah, a banker in his 50s, heads a team that deals with complex financing. The range of customers ranged from Asian tycoons to European producers of renewable energy. Papers from an Indonesian conglomerate are as much a part of the business as junk securities from an Israeli shipping company. Not many people in Frankfurt know Shah. In the bank’s accounts, yes: its global finance and credit trading group generates annual revenues estimated at three billion euros, or about a third of the investment bank. So everything is fine ? If the markets turned around, it could show what risks were lurking there, hence Bloomberg’s conclusion.