Deutsche Bank
| Type | Public (NYSE: DB) |
|---|---|
| Founded | 1870 |
| Headquarters |  Frankfurt am Main, Germany |
| Key people | Josef Ackermann, Chief Executive Officer and Chairman of the Management Board Clemens Börsig, Chairman of the Supervisory Board |
| Industry | Finance and insurance |
| Products | Commercial banking, Investment banking, Private banking, Asset management, Mortgages |
| Revenue | ▲ €67.706 billion (2007)[1] |
| Net income | ▲ €6.510 billion (2007) |
| Total assets | ▲ €2.020 trillion (2007) |
| Total equity | ▲ €37.044 billion (2007) |
| Employees | 81,308 (September 30, 2008) |
| Website | www.db.com |
Deutsche Bank AG (literally "German Bank"; pronounced [ˈdɔɪtʃə]; ISIN: DE0005140008, NYSE: DB) is an international Universal bank with a broad private clients franchise, headquartered in Frankfurt, Germany. The bank employs more than 81,000 people in 76 countries, and has a large presence in Europe, the Americas, Asia Pacific and the emerging markets.
Deutsche Bank has offices in finance-hubs, including London, Moscow, New York, Singapore, Sydney, Hong Kong and Tokyo. Furthermore, the bank is investing in expanding markets such as the Middle East, Latin America, Central & Eastern Europe and Asia Pacific.
The bank offers financial products and services for corporate and institutional clients along with private and business clients. Services include sales, trading 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.
Deutsche Bank’s Chief Executive Officer and Chairman of the Group Executive Committee, since 2002, is Josef Ackermann. The Bank, in terms of its revenues, is one of the top three investment banks in the world. Deutsche Bank is listed on both the Frankfurt (FWB) and New York stock exchanges (NYSE).
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History
Deutsche Bank was founded in Germany in January 1870 as a specialist bank for foreign trade in Berlin. Its first branches, inaugurated in 1871 and 1872 were opened in Bremen, Hamburg, Frankfurt, Leipzig and Dresden.
The Bank’s 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.
Furthermore, 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 bond offerings of steel company Krupp (1885) and introduced the chemical company Bayer to the Berlin stock market.
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. In 1937, the company name changed back to Deutsche Bank.
Following Germany's defeat in World War II, the Allied authorities, in 1948, ordered Deutsche Bank's break-up into ten regional banks. These 10 regional banks were later consolidated into three major banks in 1952: Norddeutsche Bank AG; Süddeutsche Bank AG; and Rheinisch-Westfälische Bank AG.
In 1957, these three banks merged to form Deutsche Bank AG with its headquarters in Frankfurt. Two years later, the bank entered retail banking by introducing small personal loans. In the 1970s, the bank pushed ahead with international expansion, opening new offices in new locations such as Moscow, London, Paris and Tokyo. In the 1980s, this continued with the acquisition of Banca d’America e d’Italia, the first time the bank had acquired a sizeable branch location in another European country.
In 1989, the first steps towards creating a significant investment banking presence were taken with the acquisition of Morgan Grenfell, a UK-based investment bank. By the mid-1990s, the build up of a capital markets operation had got under way with the arrival of a number of high-profile figures from major competitors. Ten years after the acquisition of Morgan Grenfell, the U.S. firm, Bankers Trust, was added.
In 2001, Deutsche Bank was listed on the New York Stock Exchange (NYSE). The following year, 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 Russian investment bank United Financial Group (2006). In Germany, further acquisitions of Noris Bank and Berliner Bank strengthened Deutsche Bank’s retail offering in its home market. This series of acquisitions was closely aligned with the bank’s strategy of bolt-on acquisitions in preference to so-called “transformational” mergers. These formed part of an overall growth strategy that also targeted a sustainable 25% return on equity, something the bank achieved in 2005.
During the financial crisis of 2007/2008 Deutsche Bank has so far written off about €7 billion which is far less then most of the world's major banks. (source Bloomberg)
Performance
| Year | 2007 | 2006 | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|
| Net Income | €6.5bn | €6.0bn | €3.8bn | €2.5bn | €1.4bn |
| Revenues | €30.7bn | €28.3bn | €25.6bn | €21.9bn | €21.9bn |
| Return on Equity | 29% | 30% | 26% | 16% | 1% |
| Dividend | 4.5 | 4.0 | 2.5 | 1.7 | 1.5 |
Deutsche Bank has been transformed over the past five years, moving 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 recognised for its progress and was named IFR Bank of the Year twice in a three year period, in 2003 and 2005.
For 2007, Deutsche Bank reported a profit of €6.5 billion, a 7% increase on 2006. The bank was less affected than some of its competitors by the subprime crisis that hit the financial markets in the summer of 2007. Deutsche Bank’s CEO, Josef Ackermann, was one of the first prominent figures from the financial community to call for greater transparency among major institutions.
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); Anthony Di Iorio (Chief Financial Officer); Hermann-Josef Lamberti (Chief Operating Officer) and Stefan Krause.
The Group Executive Committee is the Management Board plus the heads of the bank’s business areas, namely: Michael Cohrs (Global Banking); Anshu Jain (Global Markets); Jürgen Fitschen (Regional Management); Rainer Neske (Private & Business Clients); Kevin Parker (Asset Management); and Pierre de Weck (Private Wealth Management).
The Supervisory Board of the bank is chaired by Clemens Börsig.
Business Structure
Deutsche Bank’s mission statement is: “We compete to be the leading global provider of financial solutions for demanding clients creating exceptional value for our shareholders and people.” The bank’s business model rests on two pillars: the Corporate & Investment Bank (CIB) and Private Clients & Asset Management.
CIB
In little over a decade, Deutsche Bank’s CIB has established itself as one of the world’s leading investment banking houses. CIB comprises the bank’s market-leading Global Markets and Global Banking Divisions.
Until recently, Global Markets contributed a major slice of Deutsche Bank’s profitability and revenues. The business is responsible for sales and trading of debt and equity, derivatives and other innovative products. Global Markets’ prowess in bond markets, foreign exchange and derivatives has brought many awards and accolades over the past five years.
Global Banking comprises a major Merger & Acquisitions (M&A) practice that has grown significantly over the past five years. In 2007, the bank’s M&A business, in competition with banks and institutions with long-standing and well established M&A reputations, made further strides in building a world-class franchise. Global Banking also includes a global capital markets business that has a significant and innovative presence in the European initial public offering , equity, debt and high yield markets. Coverage of clients is also housed in Global Banking.
Global Transaction Banking, which forms part of Global Banking, deals with cash management, clearing, trade finance and trust & securities services. This business has grown five fold in recent years and it now an industry leader. Deutsche Bank has won numerous awards for the quality of its transaction banking service especially in the area of cash management. It is now one of the largest divisions of the Bank by ranked by IBIT.
CIB’s clients are mainly private and public sector institutions, including sovereign states, supranational bodies, global and multinational companies and medium-sized and small businesses.
PCAM
Private Clients & Asset Management (PCAM) is composed of Private Wealth Management, Private & Business Clients and Asset Management. This trio of business divisions include Deutsche Bank’s investment management business for private and institutional clients, together with retail banking activities for private clients and small and medium-sized businesses.
Private Wealth Management
Private Wealth Management is the bank’s private banking arm, serving high net worth individuals and families worldwide. The division has a strong presence in the world's private banking hotspots, including Switzerland, Luxembourg, the Channel Islands, the Caymans and Dubai.
Private & Business Clients
Private & Business Clients is Deutsche Bank’s retail network which has grown significantly over the past few years, expanding in Italy, Spain and Poland as well as the bank’s home market of Germany. In the past two years, expansion has also taken place in emerging markets such as India and China. Asset Management manifests itself in a number of ways at Deutsche Bank. In Germany, DWS Investments is an award-winning a highly respected mutual fund manager with around €270bn under management. In the U.S. and Europe, RREEF Alternative Investments, the global alternative investment management arm of Deutsche Bank, had more than €60bn of assets under management as at the end of 2007.
Communication
Early understanding of modern communication tools has contributed to create the international recognition Deutsche Bank enjoys today. In 1972 the bank created the world known blue logo "Slash in a Square" designed by Anton Stankowski. Deutsche Bank owns the two-letter-domain db.com since September 1997. Deutsche Bank is now one of the few large corporations worldwide and the only bank in Germany to own a two letter ".com" domain name.[2]
Acquisitions
- Morgan, Grenfell & Company, 1990.
- Bankers Trust (Successfully Closed) 30 November 1998.[3]
- Scudder Investments, 2001
- Berkshire Mortgage Finance October 22, 2004.[4]
- Chapel Funding, now DB Home Lending September 12 2006[5]
- MortgageIT Holdings January 3, 2007[6]
Notable current and former employees
- Hermann Josef Abs - Deutsche Bank chairman (1957-67)
- Sir John Craven - Financier in London
- Michael Dobson - Head of Schroders
- Alfred Herrhausen - Deutsche Bank chairman (1971-89)
- Edson Mitchell - Head of Global Markets (1953-2000)
- Karl Kimmich - Deutsche Bank chairman (1942-1945)
Public service
- Otto Hermann Kahn - Philanthropist
See also
- European Financial Services Roundtable
References
External links
- Deutsche Bank Corporate Website
- German-Turkish Internet Platform of Deutsche Bank
- Yahoo! Finance - Deutsche Bank AG Company Profile
- Deutsche Bank AG historical chart
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