Deutsche Bank

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Deutsche Bank
Deutscheb big-1-.gif
Founded 1870
Headquarters Frankfurt, Germany (Locations [1])
Key People John Cryan, CEO; Dr. Stuart Lewis, chief risk officer; Dr. Marcus Schenck, CFO; Kim Hammonds, COO
Employees 98,000+[1] (end of 2014)
Products Investment bank
Website www.deutsche-bank.com

Deutsche Bank is a global investment bank with offices in more than 70 countries. Deutsche Bank's lines of business include corporate banking and securities, transaction banking, asset management and private wealth management. It has a significant private and business banking franchise in Germany and other selected countries in Continental Europe.

Deutsche Bank Securities Inc. is the investment banking and securities arm of Deutsche Bank AG in the United States.

Products and Services (Corporate and Investment Bank)

Deutsche Bank provides advisory services for mergers and acquisitions, for private equity firms (including access to derivative and equity products) and access to industry specialists. The bank provides asset finance and leasing, cash management, exchange traded funds, trade finance, and trust and securities services, including debt and equity services and structured finance.

DB's Corporate Finance and Global Transaction Banking activities are collectively called Global Banking.

Its corporate finance services include: advisory; equity capital markets; debt finance; commercial real estate; UK corporate brokering; client coverage; industry and regional specialization

Products and Services (Private Clients/Asset Management)

PCAM is Deutsche Bank's investment management business for private and institutional clients. It has two corporate divisions, Asset and Wealth Management and Private & Business Clients. Services include: certificates and warrants, foreign exchange trading, private wealth management and banking services for private and business clients while away in Europe.

DWS Investments, founded in 1956, is the mutual fund arm of Deutsche Asset Management. In Europe, DWS ranks as the second-largest mutual fund company. Originally concentrated in European markets, it now covers countries and products across the United States, Asia Pacific and the Middle East.[2]

RREEF is the global alternative investment management business of Deutsche Bank’s Asset Management division. It is headquartered in New York.[3]

RREEF Alternative Investments consists of four businesses: real estate, infrastructure, private equity, and hedge funds.

Deutsche Asset Management is the fiduciary institutional investment management business of Deutsche Bank's Asset Management division.[4]

Key People

  • Dr. Marcus Schenck: CFO (responsible for finance; tax; corporate insurance; investor relations; corporate governance; audit and operations of securities settlement according to MaRisk)
  • Kim Hammonds: COO
  • Christian Sewing, head of private & business clients

Timeline

1870 Deutsche Bank is founded in Berlin - its purpose: "to transact banking business of all kinds, in particular to promote and facilitate trade relations between Germany, other European countries and overseas markets."
1871/72 First branches in Bremen and Hamburg, followed by more branches in, for example, Frankfurt am Main, Munich, Leipzig and Dresden.
1873 Opening of the first European foreign branch in London.
From 1880 Deutsche Bank begins to supply industry with loans and capital market products. Foreign investments in North and South America, Eastern Asia and Turkey.
From 1914 As a result of the acquisition of several regional banks Deutsche Bank establishes a branch network all over Germany.
1929 The biggest ever merger in German banking history creates the “Deutsche Bank und Disconto-Gesellschaft.”
From 1933 Jewish employees are forced to resign.
1937 The company name is changed back to “Deutsche Bank.”
1938 Deutsche Bank is involved in "Aryanisations" (in Nazism, a term used for the expropriation of Jews, Roma (gypsies), Slavs, Poles, Communists, mentally and physically handicapped in Nazi Germany, Austria and the territories it controlled.
1945 Closure of Deutsche Bank’s Berlin head office and of all branches in the Soviet-occupied zone.
1947/48 In the western zones of occupation, Deutsche Bank is decentralized into ten regional institutions.
1952 The so-called Big Banks Act allows the amalgamation of the ten successor institutions into three joint stock companies: Norddeutsche Bank AG, Rheinisch-Westfälische Bank AG and Süddeutsche Bank AG.
1957 Re-amalgamation of the three successor banks to form Deutsche Bank AG, a joint stock corporation with its registered office in Frankfurt am Main.
1959 Deutsche Bank enters retail banking by introducing small personal loans.
1970 Foundation of today’s Deutsche Bank Luxembourg S.A.; in the next ten years, the bank pushes ahead with the internationalization of its business; offices are opened at new locations such as Moscow, London, Tokyo, Paris and New York.
1986 Acquisition of Banca d´America e d´Italia; this is the first time the bank has acquired a sizeable branch network in another European country.
1989 Acquisition of Morgan Grenfell Group; with this step, Deutsche Bank strengthens its position in the international securities business and expands its presence on the important London capital market.
1990 Deutsche Bank starts operations in the new federal states with the foundation of Deutsche Bank-Kreditbank AG.
1999 Acquisition and integration of Bankers Trust in the U.S.
2001 The Deutsche Bank share is traded for the first time on the New York Stock Exchange.
2002 Purchase of the US asset manager Scudder Investments.
2003 Acquisition of the Swiss Private Bank Rued Blass & Cie.
2006 Complete acquisition of the Russian investment bank United Financial Group (UFG).
2015 Deutsche Bank is fined $2.5 Billion by US and UK regulatory authorities in connection to the LIBOR scandal
2016 In September, the U.S. Department of Justice announced it was seeking $14 billion in fines for Deutsche Bank's involvement in bundling toxic mortgages into securities during the period of 2005-2007.

History

Founded in 1870 in Berlin, Kingdom of Prussia, Deutsche Bank survived as a single entity until 1947, when it was broken up by the postwar allied occupation government. In 1957 the successor companies merged back together to form Deutsche Bank AG, headquartered in Frankfurt aum Main, West Germany.[5]

In May of 2010, Deutsche Bank's chief financial officer Stefan Krause called for a “level playing field” on regulatory issues such as capital requirements after Germany introduced a ban on naked short-selling.[6]

In May of 2010, Deutsche Bank AG was advised by a Frankfurt appeals court to settle a lawsuit brought by a utility in Pforzheim, Germany, over interest rate swaps. The Frankfurt Higher Regional Court recommended Deutsche Bank pay half the 4 million euros ($4.9 million) sought by Stadtwerke Pforzheim, the newspaper said. The utility said the lender wrongfully advised it when selling the derivatives, the FAZ added. Deutsche Bank denied the allegations.[7]

In August of 2011, the bank made an unusual move by appointing co-CEO's; Anshu Jain and Juergen Fitschen to replace Josef Ackermann. It was believed at the time that one of the co-CEO's would step down in a few years. [8]

In April 2015, the U.S. Commodity Futures Trading Commission simultaneously brought and settled charges against Deutsche Bank for manipulating and attempting to manipulate the LIBOR for U.S. Dollar, Yen, Sterling, and Swiss Franc, and the Euribor. The CFTC fined DB $800 million and ordered it to cease and desist from violating the Commodity Exchange Act.[9] The bank agreed to pay $2.5 billion to the U.S. and British authorities.

In June 2015, its two co-CEOs, Anshu Jain and Jürgen Fitschen, resigned: Jain effective at the end of the month, Fitschen effective the following May. They were replaced by John Cryan, a former UBS AG finance chief.

Under Jain and Fitschen, Deutsche had stuck to an expensive universal banking model that left it behind rivals such as UBS and Barclays, which rid themselves of unprofitable business lines.[10]

Analysts said the bank had a number of structural issues apart from management that were causing problems, including the lack of a highly profitable private bank, and a historically poor return on equity.[11]

On June 9th, 2015 German prosecutors raided the offices of Deutsche Bank in connection to tax fraud related to consumer transactions.[12]

In December of 2015 a lawsuit was filed against Deutsche Bank in Federal District Court for the Southern District of New York accusing the bank of using high-speed trading software to profit in foreign currency markets at the expense of customers.[13]

In August of 2017, Deutsche Bank and Bank of America agreed to pay a combined $65.5 million to settle investor litigation accusing the banks of rigging the $9 trillion government agency bond market over a decade. The settlements were the first in litigation that accused 10 banks of engaging in a conspiracy to rig the market for U.S. dollar-denominated supranational, sub-sovereign and agency bonds.[14]

Spin-offs

In August 2010, the company announced it had spun off the quantitative strategies group from DB Advisors, its institutional asset-management operations, via a management buyout. Financial details weren't disclosed. The newly named QS Investors, LLC, with $11 billion in assets under management, continues to provide services that include global tactical asset allocation, U.S. active quantitative equity investing and what it calls diversified-based investing that focuses on countries and sectors, rather than individual stocks. It also acts as a sub-advisor for Deutsche Bank funds it currently manages.[15]

A person familiar with the situation told the Wall Street Journal in early August that the two spinoffs had achieved what DB Advisors set out to do, and that there wouldn't be further spinoffs within the unit in the near term. The bank said in January 2010 that it was still strongly committed to expanding its asset-management division, which had $675 billion in assets under management as of June 30.

References

  1. "Employee Figures”. Deutsche Bank.
  2. "DWS Investments”. DWS.
  3. "Welcome to RREEF Alternative Investments”. www.rreef.com.
  4. "DeAM”. DEAM.
  5. Chronicle – from 1870 until today. Deutsche Bank.
  6. Deutsche Bank CFO Calls for Coordinated Regulation. Bloomberg.
  7. Deutsche Bank Advised by Court to Settle Utility Swaps Case, FAZ Reports. Bloomberg.
  8. When two heads might just be better than one. Belfast Telegraph.
  9. Deutsche Bank to Pay $800 Million Penalty to Settle CFTC Charges of Manipulation, Attempted Manipulation, and False Reporting of LIBOR and Euribor. CFTC.
  10. Investors say new boss brings fresh eye to Deutsche Bank's challenges. Reuters.
  11. Look at the crazy mess new Deutsche Bank CEO John Cryan is expected to fix. Business Insider.
  12. Deutsche Bank Headquarters Raided in Probe. USA Today.
  13. Deutsche Bank to Face British Lawsuit Over High-Speed Trading. The New York Times.
  14. Deutsche Bank, Bank of America settle agency bond rigging lawsuits. Reuters.
  15. Deutsche Bank Spins Off Quant Fund Managers. Wall Street Journal.
Last modified on 18 August 2017, at 00:54