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  • Deutsche Bank Case: Factors

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    NEERAJ N RCBS
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    Deutsche Bank faced several financial challenges in the late 2000s. The financial crisis reduced bank profitability and European sovereign debt issues added uncertainty. Deutsche Bank's share price fell as it relied primarily on investment banking with no other major business lines. It also lacked a strong retail banking presence in its home market of Germany. Multiple factors including weak earnings, restructuring costs, regulations, and legal risks increased Deutsche Bank's need for more capital. However, the bank had few options to raise additional capital as key financial metrics declined annually. This capital shortage limited Deutsche Bank's ability to reduce assets and liabilities as needed.

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    Deutsche Bank Case

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    Deutsche Bank faced several financial challenges in the late 2000s. The financial crisis reduced bank profitability and European sovereign debt issues added uncertainty. Deutsche Bank's share price fell as it relied primarily on investment banking with no other major business lines. It also lacked a strong retail banking presence in its home market of Germany. Multiple factors including weak earnings, restructuring costs, regulations, and legal risks increased Deutsche Bank's need for more capital. However, the bank had few options to raise additional capital as key financial metrics declined annually. This capital shortage limited Deutsche Bank's ability to reduce assets and liabilities as needed.

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    12 просмотров1 страница

    Deutsche Bank Case: Factors

    Загружено:

    NEERAJ N RCBS
    Deutsche Bank faced several financial challenges in the late 2000s. The financial crisis reduced bank profitability and European sovereign debt issues added uncertainty. Deutsche Bank's share price fell as it relied primarily on investment banking with no other major business lines. It also lacked a strong retail banking presence in its home market of Germany. Multiple factors including weak earnings, restructuring costs, regulations, and legal risks increased Deutsche Bank's need for more capital. However, the bank had few options to raise additional capital as key financial metrics declined annually. This capital shortage limited Deutsche Bank's ability to reduce assets and liabilities as needed.

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    © All Rights Reserved
    Скачайте в формате DOCX, PDF, TXT или читайте онлайн в Scribd
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    из 1

    Deutsche Bank Case

    Factors

    1. The financial crisis of 2008 reduced the profitability of banking sectors.


    2. The Sovereign debt issues of many European Union Countries added more insecurities.
    3. Fall in share price.
    4. Deustche bank mainly focussed on investment banking and has no other businesses with
    the scale or profitability to regroup.
    5. Retail Banking in Germany was tough, Deustche doesn’t have a strong home market to
    rely on.
    6. The combination of Weak Earnings, High Restructuring Costs, tightening regulations and
    legal risks, requires more Capital.
    7. A key measure of financial Strength Total Assets(Tier 1 Capital) was declining year over
    year.
    8. The bank had very few options available to raise Capital.
    9. To decrease its trading book assets and liabilities Deutsche bank needed to shed more
    assets or increase its equity base both requiring the need to raise Capital.
    10. It reduced leverage between 2007&2011 thereby addressing Capital concerns.
    11. Investors were concerned that Deutsche Bank would need additional resources to meet
    the equity needs.
    12. The profits failed to come from the productive assets of the bank.
    13. The P/TB ratio was less than1x and it had a steady decrease meaning the company is not
    expected to increase to earn profits in excess of its cost of capital, and therefore book
    value will deteriorate over time.

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