Chillin' out till it needs to be funded
Anshu Jain and Juergen Fitschen appointed, Deutsche Bank sticks to a $14 bln pop for 2011
The succession battle at Deutsche Bank has been resolved and Core I Capital as of Q2 after results tomorrow will be 10.1% For the bank, that was the only concession to global banking denizens, following and scripting its own German regulation and its own peculiar success story. Ackerman would thus handhld the remaining one year of his tenure refereeing two CEOs as German Juergen Fitschen was required to counterbalance the non German Anshu Jain’s global ways.
The bank had chosen Ackerman also from the Investment Bank and Anshu Jain’s division , responsible for as much as 85% of the profits of the bank till before the crisis, continues to be the one profitable forum for the bank, denied its leadership as the retail bank struggles to make its mark. However , given the events of 2008 , it may be prudent to not put all eggs in the Corporate Investment Banking basket for the one of two survivors in Europe after Barclays, Lloyd, BNP and even RBS have sunk in an abyss of their own.
According to Reuters Insider, the bank has reported a $ 1.68 bln profit for the second quarter in line with the first but nowhere nearits runrate required for a $14 bln or Euro 10 bln EBITDA with the EBITDA coming in at Eur 1.8 bln or $ 2.52 bln. Sales revenue for CIB are a $4.1 bln or EUR 2.9 bln ( We have assumed a Eur rate of $1.40 throughout) with REtail ( Private Clients and Asset Management ) reporting one third of the bank EBITDA. The bank also reported a more than $220 mln impairment on its Greek bonds holding.
Wealth Management has added a mere EUR 5 bln in assets in the quarter while CIB is trying very hard to cross the pond and get some good US business for the Co-CEO’s home division
Its $3 bln Q1 ( $4.2 bln EBITDA) had a sales revenue from Sales and Trading in CIB a good 57% higher at $6.44 bln.
Global TRansaction Banking revenues a renewed focus at competitor Goldman Sachs and a success gene for JP Morgan was consistent for Deutsche Bank too across Trust and Custodial Services as well as Trade Finance a Eur 865 mln and EUR 895 mln for Q1 and Q2
Traditional retail banking ( excl asset / wealth management) reported a 77% year on year increase in revenues giving EUR 2.6 bln in revenues , or $3.7 bln of which Postbank interests were a revenues of $2 bln Juergen Fitschen has an Indian connection as the Member on the Board of the Indian School of Business and has been Chairman of the Supervisory Board in Russia DB board members have close links to Allianz,Bayer and Lufthansa among others in the parochial German reglatory system, yet governed by cross holdings across industry. Contrary to perception, as HEad of Regional Management Fitschen is not in charge of Germany , the DB management listing Panske with the responsibility, but integration with Postbank may well be his focus right away.