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DEUTSCHE BANK

Analysis before buying or selling Deutsche Bank shares

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Deutsche Bank's revenue and market capitalization

10/12/2021 - 08h34

Like many other companies in the banking sector, German giant Deutsche Bank announced its results for the financial year 2020 in February 2021. Overall, they came out strong.

Elements to consider before selling or buying Deutsche Bank shares

Analysis N°1

We would notably monitor the abilities of the Deutsche Bank Group to develop on a digital level. In fact, the group has recently invested in various digital platform solutions as well as innovative digital integration strategies for its activities. Due to these developments Deutsche Bank benefits from a major growth boost in the worldwide financial sector.

Analysis N°2

The demand for banking clients is also undergoing full growth. This is notably the case with the strong development of countries in the technological sector but also with global changes in lifestyle, the increasing search for banking solutions that offer simple and practical services, the growth increase in emerging countries and the demand for different financial services under the same brand from which this German banking group could benefit to boost its growth.   

Analysis N°3

Although the Deutsche Bank Group is currently represented in over 70 countries with at least 2,700 branches and over 98,000 employees it is also interested in emerging countries and economies that are in full development that offer attractive expansion possibilities.  

Analysis N°4

In addition, although the range of services and activities of Deutsche Bank is already quite varied including corporate services, real estate, asset and wealth management, international banking services, non essential services and those aimed at private and corporate banking, the current diversification towards other types of activity implemented by this group should enable it to increase its revenue.      

Analysis N°5

The emergence of companies in the technological domain represent a real threat for Deutsche Bank as they play a preponderant role in the implementation of the economy and finance industry. These companies therefore represent direct competition for the banks and notably benefit from the ability to analyse huge amounts of data and offer personalised service for their clients.    

Analysis N°6

The online banks and their strong development over the last few years are also a threat to Deutsche Bank’s market share. These new generation banks offer attractive prices and a great simplicity of use with their internet based operation.

Analysis N°7

We would also take into account any possible regulatory reforms that could concern the financial activity sector in the coming years. This sector is already one of the most regulated and the current trend leans towards a strengthening of the regulations in the German sector as well as that of Europe in general.

Analysis N°8

Finally, we would recommend monitoring the interest rates that could exert pressure on the margins of banking groups or require players in this market to adjust their pricing methods.

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General presentation of Deutsche Bank

The Deutsche Bank Group is one of the leading banks in Germany. Its activities are divided among several sectors the primary of which is retail banking, as well as private banking and asset management, but also including investment banking, finance, stock markets and other lesser services in its global turnover.

Currently Deutsche Bank manages no less than 500 billion Euros in outstanding deposits and 370 billion Euros in outstanding loans. It counts 2,907 agencies throughout the world with the majority in Germany but also in the Middle East, Africa, America and Pacific Asia.

Analysis before buying or selling Deutsche Bank shares
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The major competitors of Deutsche Bank

The Deutsche Bank Group faces strong competition in Europe and the rest of the world. It is important to be aware of these different opponents before buying or selling:

BNP Paribas 

This French bank is the largest European bank by activity and profitability and the eighth largest in the world. It operates in more than 65 countries around the world and is listed on the Euronext Paris market. The company is also included in the CAC 40 stock market index. It employs more than 190,000 people and is organised into three main business areas including Commercial, Personal Banking & Services and Investment & Production Services.

Barclays 

This British bank is based in London, UK and was established in 1896. It is also listed on the FTSE 100 index and is one of the largest British and global banks. Barclays is present in more than 60 countries in Europe, the UK, Asia, America and Africa. It currently employs 111 300 people worldwide, including 32 000 in South Africa through its new subsidiary Avsa.

Goldman Sachs 

This company listed on the New York Stock Exchange is also known as GS and is an investment bank founded in 1869 with its headquarters on Wall Street. In addition, Goldman Sachs has offices in the most important financial centres including New York, London, Tokyo and Paris.

Citigroup

This financial company, which operates under the name Citi, is a major New York-based financial company that was formed from the merger of Citicorp with Travelers Group in 1998. It is also one of the largest companies in the world according to Forbes Global 2000. The group currently employs 219,000 people worldwide and has over 200 million customers in more than 100 countries. The company has also been included in the Dow Jones Industrial Average since 1997.

BPCE

BPCE is actually the joint central body of the French Banque Populaire and Caisse d'Epargne. The group is also the second largest cooperative financial institution in the world after Crédit Agricole. It integrates all the companies that made up the two banking groups and their own and joint subsidiaries.

Crédit Agricole 

Finally, Crédit Agricole, formerly known as the "Green Bank" because of its original focus on agriculture, is now the largest network of cooperative and mutual banks in the world. Crédit Agricole is composed of more than 39 Crédit Agricole Regional Banks in France. In 1990, it became an international generalist banking group. It is listed on the stock exchange through its holding company Crédit Agricole SA, on the first market of Euronext Paris and is part of the CAC 40 index.


The major partners of Deutsche Bank

In June 2001 BNP Paribas collaborated with five of the largest global financial establishments to create the first worldwide alliance in the ATM (Automatic Teller Machine) sector, this was named ‘Global Alliance’ and included Deutsche Bank.  

Attijariwafa Bank

In 2014 the Attijariwafa Bank and Deutsche Bank proceeded with the signature of a significant memorandum agreement. This was aimed at constructing and developing a global co-branded solution to banking transactions with the emphasis placed on the respective and complementary expertise of the two banks in their respective markets.

Mastercard and Ogone

A major international online payments provider, announced their partnership in 2013 on the integration and deployment of MasterPass, considered as a major future player in digital transactions, with several large European banks including Deutsche Bank.

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Positive factors for Deutsche Bank shares
The factors in favour of a rise in the Deutsche Bank share price:

Before taking a long term position on purchasing Deutsche Bank shares it is important to obtain a maximum of information that will indicate the future prospects for the share price. To do so a comparison between the strengths and weaknesses of this banking group is highly valuable. To assist you with this we have prepared an in depth study of the major advantages of this company. 

Of course, the position of this banking group on the European banking market is the primary advantage of this company. The Deutsche Bank is currently the top European bank notably due to its solid experience in Germany which is the country with the greatest economic power in Europe. The range of solutions and services offered by Deutsche Bank have been created for all types of clients, individuals as well as corporate, with asset management contracts, banking transactional services, corporate financial services, company financing on capital markets, wealth management and of course retail banking services.    

We can also appreciate the advantages provided by this company’s ability to consolidate its affairs. To strengthen its activities the group has concentrated on optimising its resources and thereby its capital. It also recently proceeded with a total reorganisation of its commercial divisions in three distinct divisions with the objective of strengthening each subsidiary and thereby optimise coverage and increase its market share.

More specifically in Germany, the Deutsche Bank group has succeeded in developing in the retail commerce sector. This was made possible notably by the integration of the Postbank company and PCB activities in the German market. Deutsche Bank has also become a leader in this area with a global efficacy based on the major benefits achieved and the global financial stability of the group.   

The group has also greatly strengthened its activities in the investment bank. Deutsche Bank has in fact increased its activities related to multinationals on a worldwide level with the creation of a business and investment bank unique in its sector that is founded on the long expertise and experience of this historical bank.  

Finally, we can also note the strong brand image of the Deutsche Bank Group as an undeniable advantage. In fact, in a list of 2,000 worldwide brands created by Forbes magazine in 2017 Deutsche Bank is placed at number 441. In the same year the company was valued at over 34 billion dollars with a revenue of around 44.28 billion dollars.

Negative factors for Deutsche Bank shares
The factors in favour of a drop in the Deutsche Bank share price:

As you have probably already surmised, the strong points of Deutsche Bank are not the only factors to take into account before implementing your investment strategy with this asset and you should therefore also know and understand the weak points of this asset. We will therefore now continue with a detailed list of the weak points of this banking group that could negatively influence the growth of its stock market value.     

The major weak point of the Deutsche Bank Company concerns the changes that recently took place in the current legislation of certain favoured activity sectors of this group. These changes actually lead to a significant decrease in the activities of Deutsche Bank as well as a consolidation in its historical activities.   

To conclude we note a limited opening for this group on an international level. In fact, although Deutsche Bank benefits from a strong presence in the European market, its development outside this geographical zone remains very limited. Due to this restraint the group does not have the same advantages as some of its competitors for development in the emerging markets which remain a choice target for the future of banks worldwide.

As you may notice, the weaknesses of the Deutsche Bank Group are fairly few compared to the numerous advantages it possesses. However, these weak points could seriously impair the abilities of this company to grow positively in the future and could exert a major influence on the future trends of this share price. It would therefore be prudent to reflect carefully and take these points into account.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

Who are the main shareholders of the Deutsche Bank group?

Currently, the main shareholders of the Deutsche Bank group are Cerberus Capital Management with 6%, Hainan Traffic Administration Holding with 4.82%, Hamad bin Jassim bin Jabor Al-Thani with 4.07%, Hudson Executive Capital with 3.14%, The Vanguard Group with 2.91% , Goldman Sachs International with 1.62%, BlackRock Asset Management Deutscheland with 1.61%, BNP Paribas Asset Management France with 1.43%, Lyxor International Asset management with 1.27% and Capital Research & Management WI with 1.16%.

What are the different services of Deutsche Bank?

Deutsche Bank's business is currently divided into five main departments. The Markets service with trading and sales, government bonds, private debts, currencies, rates, equities and derivatives, the Global Transaction banking division with corporate financing, private debt issues and restructuring or real estate transactions, the Corporate Finance division with advice on mergers and acquisitions and others, the Asset management division with asset management activities and the Private Wealth Management division for VIP clients.

How to analyse Deutsche Bank charts?

To analyse Deutsche Bank stock charts, you should use the main technical indicators for trend and volatility. Among the latter, there is the MACD indicator, moving averages, Bollinger bands along with the various points of trend acceleration or reversal such as pivot points, supports and technical resistances.

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