Deutsche Bank

Deutsche Bank

Overview
Deutsche Bank AG is a global financial service company with its headquarters in Frankfurt, Germany. It employs more than 100,000 people in over 70 countries, and has a large presence in Europe, the Americas
Americas
The Americas, or America , are lands in the Western hemisphere, also known as the New World. In English, the plural form the Americas is often used to refer to the landmasses of North America and South America with their associated islands and regions, while the singular form America is primarily...

, Asia Pacific and the emerging markets
Emerging markets
Emerging markets are nations with social or business activity in the process of rapid growth and industrialization. Based on data from 2006, there are around 28 emerging markets in the world . The economies of China and India are considered to be the largest...

. Deutsche Bank is the largest foreign exchange dealer in the world with a market share of 21 percent.

Deutsche Bank has offices in major financial centers including New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...

, London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...

, Frankfurt
Frankfurt
Frankfurt am Main , commonly known simply as Frankfurt, is the largest city in the German state of Hesse and the fifth-largest city in Germany, with a 2010 population of 688,249. The urban area had an estimated population of 2,300,000 in 2010...

, Paris
Paris
Paris is the capital and largest city in France, situated on the river Seine, in northern France, at the heart of the Île-de-France region...

, Moscow
Moscow
Moscow is the capital, the most populous city, and the most populous federal subject of Russia. The city is a major political, economic, cultural, scientific, religious, financial, educational, and transportation centre of Russia and the continent...

, Amsterdam
Amsterdam
Amsterdam is the largest city and the capital of the Netherlands. The current position of Amsterdam as capital city of the Kingdom of the Netherlands is governed by the constitution of August 24, 1815 and its successors. Amsterdam has a population of 783,364 within city limits, an urban population...

, Dublin, Toronto
Toronto
Toronto is the provincial capital of Ontario and the largest city in Canada. It is located in Southern Ontario on the northwestern shore of Lake Ontario. A relatively modern city, Toronto's history dates back to the late-18th century, when its land was first purchased by the British monarchy from...

, São Paulo
São Paulo
São Paulo is the largest city in Brazil, the largest city in the southern hemisphere and South America, and the world's seventh largest city by population. The metropolis is anchor to the São Paulo metropolitan area, ranked as the second-most populous metropolitan area in the Americas and among...

, Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...

, Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...

, Tokyo
Tokyo
, ; officially , is one of the 47 prefectures of Japan. Tokyo is the capital of Japan, the center of the Greater Tokyo Area, and the largest metropolitan area of Japan. It is the seat of the Japanese government and the Imperial Palace, and the home of the Japanese Imperial Family...

, Sydney
Sydney
Sydney is the most populous city in Australia and the state capital of New South Wales. Sydney is located on Australia's south-east coast of the Tasman Sea. As of June 2010, the greater metropolitan area had an approximate population of 4.6 million people...

, Dubai
Dubai
Dubai is a city and emirate in the United Arab Emirates . The emirate is located south of the Persian Gulf on the Arabian Peninsula and has the largest population with the second-largest land territory by area of all the emirates, after Abu Dhabi...

, Riyadh
Riyadh
Riyadh is the capital and largest city of Saudi Arabia. It is also the capital of Riyadh Province, and belongs to the historical regions of Najd and Al-Yamama. It is situated in the center of the Arabian Peninsula on a large plateau, and is home to 5,254,560 people, and the urban center of a...

 and Mumbai
Mumbai
Mumbai , formerly known as Bombay in English, is the capital of the Indian state of Maharashtra. It is the most populous city in India, and the fourth most populous city in the world, with a total metropolitan area population of approximately 20.5 million...

.

The bank offers financial products and services for corporate and institutional clients along with private and business clients.
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Encyclopedia
Deutsche Bank AG is a global financial service company with its headquarters in Frankfurt, Germany. It employs more than 100,000 people in over 70 countries, and has a large presence in Europe, the Americas
Americas
The Americas, or America , are lands in the Western hemisphere, also known as the New World. In English, the plural form the Americas is often used to refer to the landmasses of North America and South America with their associated islands and regions, while the singular form America is primarily...

, Asia Pacific and the emerging markets
Emerging markets
Emerging markets are nations with social or business activity in the process of rapid growth and industrialization. Based on data from 2006, there are around 28 emerging markets in the world . The economies of China and India are considered to be the largest...

. Deutsche Bank is the largest foreign exchange dealer in the world with a market share of 21 percent.

Deutsche Bank has offices in major financial centers including New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...

, London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...

, Frankfurt
Frankfurt
Frankfurt am Main , commonly known simply as Frankfurt, is the largest city in the German state of Hesse and the fifth-largest city in Germany, with a 2010 population of 688,249. The urban area had an estimated population of 2,300,000 in 2010...

, Paris
Paris
Paris is the capital and largest city in France, situated on the river Seine, in northern France, at the heart of the Île-de-France region...

, Moscow
Moscow
Moscow is the capital, the most populous city, and the most populous federal subject of Russia. The city is a major political, economic, cultural, scientific, religious, financial, educational, and transportation centre of Russia and the continent...

, Amsterdam
Amsterdam
Amsterdam is the largest city and the capital of the Netherlands. The current position of Amsterdam as capital city of the Kingdom of the Netherlands is governed by the constitution of August 24, 1815 and its successors. Amsterdam has a population of 783,364 within city limits, an urban population...

, Dublin, Toronto
Toronto
Toronto is the provincial capital of Ontario and the largest city in Canada. It is located in Southern Ontario on the northwestern shore of Lake Ontario. A relatively modern city, Toronto's history dates back to the late-18th century, when its land was first purchased by the British monarchy from...

, São Paulo
São Paulo
São Paulo is the largest city in Brazil, the largest city in the southern hemisphere and South America, and the world's seventh largest city by population. The metropolis is anchor to the São Paulo metropolitan area, ranked as the second-most populous metropolitan area in the Americas and among...

, Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...

, Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...

, Tokyo
Tokyo
, ; officially , is one of the 47 prefectures of Japan. Tokyo is the capital of Japan, the center of the Greater Tokyo Area, and the largest metropolitan area of Japan. It is the seat of the Japanese government and the Imperial Palace, and the home of the Japanese Imperial Family...

, Sydney
Sydney
Sydney is the most populous city in Australia and the state capital of New South Wales. Sydney is located on Australia's south-east coast of the Tasman Sea. As of June 2010, the greater metropolitan area had an approximate population of 4.6 million people...

, Dubai
Dubai
Dubai is a city and emirate in the United Arab Emirates . The emirate is located south of the Persian Gulf on the Arabian Peninsula and has the largest population with the second-largest land territory by area of all the emirates, after Abu Dhabi...

, Riyadh
Riyadh
Riyadh is the capital and largest city of Saudi Arabia. It is also the capital of Riyadh Province, and belongs to the historical regions of Najd and Al-Yamama. It is situated in the center of the Arabian Peninsula on a large plateau, and is home to 5,254,560 people, and the urban center of a...

 and Mumbai
Mumbai
Mumbai , formerly known as Bombay in English, is the capital of the Indian state of Maharashtra. It is the most populous city in India, and the fourth most populous city in the world, with a total metropolitan area population of approximately 20.5 million...

.

The bank offers financial products and services for corporate and institutional clients along with private and business clients. Services include sales, trading, research and origination of debt and equity; mergers and acquisitions
Mergers and acquisitions
Mergers and acquisitions refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or...

 (M&A); risk management
Risk management
Risk management is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities...

 products, such as derivatives
Derivative (finance)
A derivative instrument is a contract between two parties that specifies conditions—in particular, dates and the resulting values of the underlying variables—under which payments, or payoffs, are to be made between the parties.Under U.S...

, corporate finance
Corporate finance
Corporate finance is the area of finance dealing with monetary decisions that business enterprises make and the tools and analysis used to make these decisions. The primary goal of corporate finance is to maximize shareholder value while managing the firm's financial risks...

, wealth management
Wealth management
Wealth management is an investment advisory discipline that incorporates financial planning, investment portfolio management and a number of aggregated financial services...

, retail banking
Retail banking
Retail banking is banking in which banking institutions execute transactions directly with consumers, rather than corporations or other banks. Services offered include: savings and transactional accounts, mortgages, personal loans, debit cards, credit cards, and so forth.-Types of...

, fund management, and transaction banking.

Deutsche Bank’s Chief Executive Officer and Chairman of the Group Executive Committee is Josef Ackermann since May 2002. He agreed at the end of 2009 to continue as chief executive of Deutsche Bank for another three years until 2013. On July 26, 2011, along with its second quarter earnings report, Deutsche Bank reported that Anshu Jain, head of investment banking and Jürgen Fitschen, head of the German business, will replace Josef Ackermann as co-CEOs starting next year. Fears that Deutsche Bank could neglect its German roots and expand risk-taking activities prompted key members of the supervisory board to opt for the dual CEO model. Deutsche Bank is listed on both the Frankfurt (FWB
Frankfurt Stock Exchange
The Frankfurt Stock Exchange is the world's 12th largest stock exchange by market capitalization. Located in Frankfurt am Main, Germany, the Frankfurt Stock Exchange is owned and operated by Deutsche Börse, which also owns the European futures exchange Eurex and the clearing company...

) and New York stock exchanges (NYSE).

History




1870-1919


Deutsche Bank was founded in Berlin
Berlin
Berlin is the capital city of Germany and is one of the 16 states of Germany. With a population of 3.45 million people, Berlin is Germany's largest city. It is the second most populous city proper and the seventh most populous urban area in the European Union...

 in 1870 as a specialist bank for foreign trade. The bank's statute was adopted on 22 January 1870, and on 10 March 1870 the Prussian government granted it a banking license.
The statute laid great stress on foreign business: "The object of the company is to transact banking business of all kinds, in particular to promote and facilitate trade relations between Germany, other European countries and overseas markets."

The bank's first domestic branches, inaugurated in 1871 and 1872, were opened in Bremen
Bremen
The City Municipality of Bremen is a Hanseatic city in northwestern Germany. A commercial and industrial city with a major port on the river Weser, Bremen is part of the Bremen-Oldenburg metropolitan area . Bremen is the second most populous city in North Germany and tenth in Germany.Bremen is...

 and Hamburg
Hamburg
-History:The first historic name for the city was, according to Claudius Ptolemy's reports, Treva.But the city takes its modern name, Hamburg, from the first permanent building on the site, a castle whose construction was ordered by the Emperor Charlemagne in AD 808...

. Its 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
Turkey
Turkey , known officially as the Republic of Turkey , is a Eurasian country located in Western Asia and in East Thrace in Southeastern Europe...

.

Major projects in the early years of the bank included the Northern Pacific Railroad in the US and the Baghdad Railway
Baghdad Railway
The Baghdad Railway , was built from 1903 to 1940 to connect Berlin with the Ottoman Empire city of Baghdad with a line through modern-day Turkey, Syria, and Iraq....

 (1888). In Germany, the bank was instrumental in the financing of bond offerings of steel company Krupp
Krupp
The Krupp family , a prominent 400-year-old German dynasty from Essen, have become famous for their steel production and for their manufacture of ammunition and armaments. The family business, known as Friedrich Krupp AG Hoesch-Krupp, was the largest company in Europe at the beginning of the 20th...

 (1879) and introduced the chemical company Bayer
Bayer
Bayer AG is a chemical and pharmaceutical company founded in Barmen , Germany in 1863. It is headquartered in Leverkusen, North Rhine-Westphalia, Germany and well known for its original brand of aspirin.-History:...

 to the Berlin stock market.

Deutsche Bank's early decades were a period of rapid expansion. Issuing business began to grow in importance in the 1880s, and in the 1890s it really took off. The bank played a major part in the development of Germany's electrical-engineering industry, but it also gained a strong foothold in iron and steel. A solid base in Germany permitted the financing of business abroad, which in some cases kept the bank occupied for years, the best-known example being the Baghdad Railway.

The second half of the 1890s saw the beginning of a new period of expansion at Deutsche Bank. The bank formed alliances with large regional banks, giving itself an entrée into Germany's main industrial regions. Joint ventures were symptomatic of the concentration then under way in the German banking industry. For Deutsche Bank, domestic branches of its own were still something of a rarity at the time; the Frankfurt branch dated from 1886 and the Munich branch from 1892, while further branches were established in Dresden and Leipzig in 1901.

In addition, the bank rapidly perceived the value of specialist institutions for the promotion of foreign business. Gentle pressure from the Foreign Ministry played a part in the establishment of Deutsche Ueberseeische Bank in 1886 and the stake taken in the newly established Deutsch-Asiatische Bank three years later, but the success of those companies in showed that their existence made sound commercial sense.

When in spring 1914 the "Frankfurter Zeitung" told its readers that Deutsche Bank was "the biggest bank in the world",Frankfurter Zeitung, Erstes Morgenblatt, 5 March 1914. The claim marked the highpoint but at the same time the end of an era. During World War I, the source of the visionary vigor that had driven many a determined company to succeed gradually dried up.

1919-1933


The immediate postwar period was a time of liquidations. Having already lost most of its foreign assets, Deutsche Bank was obliged to sell other holdings. A great deal of energy went into shoring up what had been achieved. But there was new business, too, some of which was to have an impact for a long time to come. The bank played a significant role in the establishment of the film production company, UFA, and the merger of Daimler and Benz.

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. Increasing costs were one reason for the merger. Another was the trend towards concentration throughout the industry in the 1920s. The merger came at just the right time to help counteract the emerging world economic and banking crisis. In 1937, the company name changed back to Deutsche Bank.

The crisis was, in terms of its political impact, the most disastrous economic event of the century. The shortage of liquidity that paralyzed the banks was fuelled by a combination of short-term foreign debt and borrowers no longer able to pay their debts, while the inflexibility of the state exacerbated the situation. For German banks, the crisis in the industry was a watershed. A return to circumstances that might in some ways have been considered reminiscent of the "golden age" before World War I was ruled out for many years.

1933-1945


After Adolf Hitler
Adolf Hitler
Adolf Hitler was an Austrian-born German politician and the leader of the National Socialist German Workers Party , commonly referred to as the Nazi Party). He was Chancellor of Germany from 1933 to 1945, and head of state from 1934 to 1945...

 came to power, instituting the Third Reich, Deutsche Bank dismissed its three Jewish board members in 1933. In subsequent years Deutsche Bank took part in the aryanization
Aryanization
Aryanization is a term coined during Nazism referring to the forced expulsion of so-called "non-Aryans", mainly Jews, from business life in Nazi Germany and the territories it controlled....

 of Jewish-owned businesses: according to its own historians, the bank was involved in 363 such confiscations by November 1938. During the war, Deutsche Bank incorporated other banks that fell into German hands during the occupation of Eastern Europe. Deutsche provided banking facilities for the Gestapo
Gestapo
The Gestapo was the official secret police of Nazi Germany. Beginning on 20 April 1934, it was under the administration of the SS leader Heinrich Himmler in his position as Chief of German Police...

 and loaned the funds used to build the Auschwitz camp and the nearby IG Farben
IG Farben
I.G. Farbenindustrie AG was a German chemical industry conglomerate. Its name is taken from Interessen-Gemeinschaft Farbenindustrie AG . The company was formed in 1925 from a number of major companies that had been working together closely since World War I...

 facilities. Deutsche Bank revealed its involvement in Auschwitz in February 1999. In December 1999 Deutsche, along with other major German companies, contributed to a $5.2 billion compensation fund following lawsuits brought by Holocaust survivors. The history of Deutsche Bank during the Second World War has been documented by independent historians commissioned by the Bank.

During World War II, Deutsche Bank became responsible for managing the Bohemian Union Bank in Prague
Prague
Prague is the capital and largest city of the Czech Republic. Situated in the north-west of the country on the Vltava river, the city is home to about 1.3 million people, while its metropolitan area is estimated to have a population of over 2.3 million...

, with branches in the Protectorate and in Slovakia
Slovakia
The Slovak Republic is a landlocked state in Central Europe. It has a population of over five million and an area of about . Slovakia is bordered by the Czech Republic and Austria to the west, Poland to the north, Ukraine to the east and Hungary to the south...

, the Bankverein in Yugoslavia
Yugoslavia
Yugoslavia refers to three political entities that existed successively on the western part of the Balkans during most of the 20th century....

 (which has now been divided into two financial corporations, one in Serbia
Serbia
Serbia , officially the Republic of Serbia , is a landlocked country located at the crossroads of Central and Southeast Europe, covering the southern part of the Carpathian basin and the central part of the Balkans...

 and one in Croatia
Croatia
Croatia , officially the Republic of Croatia , is a unitary democratic parliamentary republic in Europe at the crossroads of the Mitteleuropa, the Balkans, and the Mediterranean. Its capital and largest city is Zagreb. The country is divided into 20 counties and the city of Zagreb. Croatia covers ...

), the Albert de Barry Bank in Amsterdam
Amsterdam
Amsterdam is the largest city and the capital of the Netherlands. The current position of Amsterdam as capital city of the Kingdom of the Netherlands is governed by the constitution of August 24, 1815 and its successors. Amsterdam has a population of 783,364 within city limits, an urban population...

, the National Bank of Greece
National Bank of Greece
The National Bank of Greece is the oldest and largest commercial banking group in Greece. The group has a particularly strong presence in Southeastern Europe and the Eastern Mediterranean...

 in Athens
Athens
Athens , is the capital and largest city of Greece. Athens dominates the Attica region and is one of the world's oldest cities, as its recorded history spans around 3,400 years. Classical Athens was a powerful city-state...

, the Creditanstalt-Bankverein
Creditanstalt
The Creditanstalt was an Austrian bank. The Creditanstalt was based in Vienna, founded in 1855 as K. k. priv. Österreichische Credit-Anstalt für Handel und Gewerbe by the Rothschild family...

 in Austria and Hungary, the Deutsch-Bulgarische Kreditbank in Bulgaria
Bulgaria
Bulgaria , officially the Republic of Bulgaria , is a parliamentary democracy within a unitary constitutional republic in Southeast Europe. The country borders Romania to the north, Serbia and Macedonia to the west, Greece and Turkey to the south, as well as the Black Sea to the east...

, and Banca Commercial Romana in Bucharest
Bucharest
Bucharest is the capital municipality, cultural, industrial, and financial centre of Romania. It is the largest city in Romania, located in the southeast of the country, at , and lies on the banks of the Dâmbovița River....

. It also maintained a branch in Istanbul
Istanbul
Istanbul , historically known as Byzantium and Constantinople , is the largest city of Turkey. Istanbul metropolitan province had 13.26 million people living in it as of December, 2010, which is 18% of Turkey's population and the 3rd largest metropolitan area in Europe after London and...

, Turkey
Turkey
Turkey , known officially as the Republic of Turkey , is a Eurasian country located in Western Asia and in East Thrace in Southeastern Europe...

.

Post-WWII


Following Germany's defeat in World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...

, 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
Frankfurt
Frankfurt am Main , commonly known simply as Frankfurt, is the largest city in the German state of Hesse and the fifth-largest city in Germany, with a 2010 population of 688,249. The urban area had an estimated population of 2,300,000 in 2010...

.

In 1959, 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 Milan
Milan
Milan is the second-largest city in Italy and the capital city of the region of Lombardy and of the province of Milan. The city proper has a population of about 1.3 million, while its urban area, roughly coinciding with its administrative province and the bordering Province of Monza and Brianza ,...

 (1977), Moscow, London, Paris and Tokyo. In the 1980s, this continued when the bank paid US$603 million in 1986 to acquire Banca d’America e d’Italia, the Italian subsidiary that Bank of America
Bank of America
Bank of America Corporation, an American multinational banking and financial services corporation, is the second largest bank holding company in the United States by assets, and the fourth largest bank in the U.S. by market capitalization. The bank is headquartered in Charlotte, North Carolina...

 had established in 1922 when it acquired Banca dell'Italia Meridionale. The acquisition represented the first time Deutsche Bank had acquired a sizeable branch network 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
Bankers Trust
Bankers Trust was an historic American banking organization. The bank merged with Alex. Brown & Sons before being acquired by Deutsche Bank in 1998.-History:A consortium of banks created Bankers Trust to perform trust company services for their clients....

 was added.

Deutsche continued to build up its presence in Italy with the acquisition in 1993 of Banca Popolare di Lecco
Banca Popolare di Lecco
Banca Popolare di Lecco was a bank that operated in Lecco, in northern Lombardy in Italy between 1872 and 1993. It was founded in 1872 as the Società Cooperativa di Credito Banca Popolare, with 20 branches. The idea was to create in Lecco a local credit institution that would be responsive to...

 from Banca Popolare di Novara for about US$476 million.

In October 2001, Deutsche Bank was listed on the New York Stock Exchange (NYSE). This was the first NYSE listing after interruption due to 9/11. 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 the Russian investment bank United Financial Group (2006). In Germany, further acquisitions of Norisbank, Berliner Bank and Postbank 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
Return on equity
Return on equity measures the rate of return on the ownership interest of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity . ROE shows how well a company uses investment funds to generate earnings growth...

, something the bank achieved in 2005.

Spying scandal


From as late as 2001 to at least 2007, the Bank engaged in covert espionage on its critics. The bank has admitted to episodes of spying in 2001 and 2007 directed by its corporate security department, although characterizing them as "isolated." According to the Wall Street Journal's page one report, Deutsche Bank had prepared a list of names of 20 people who it wished investigated for criticism of the bank, including Michael Bohndorf (an activist investor in the bank) and Leo Kirch
Leo Kirch
Leo Kirch was a German media entrepreneur who founded the Kirch Group.-Life:Kirch was born in Volkach, Bavaria, but shortly afterward his family moved to the nearby town of Würzburg. After completing High school he studied marketing and management as well as mathematics at the University of...

 (a former media executive in litigation with bank). Also targeted was the Munich law firm of Bub Gauweiler & Partner, which represents Kirch. According to the Wall Street Journal, the bank's legal department was involved in the scheme along with its corporate security department. The bank has since hired Cleary Gottlieb Steen & Hamilton, a New York law firm, to investigate the incidents on its behalf. The Cleary firm has concluded its investigation and submitted its report, which however has not been made public. According to the Wall Street Journal, the Cleary firm uncovered a plan by which Deutsche Bank was to infiltrate the Bub Gauweiler firm by having a bank "mole
Mole (espionage)
A mole is a spy who works for an enemy nation, but whose loyalty ostensibly lies with his own nation's government. In some usage, a mole differs from a defector in that a mole is a spy before gaining access to classified information, while a defector becomes a spy only after gaining access...

" hired as an intern at the Bub Gauweiler firm. The plan was allegedly cancelled after the intern was hired but before she started work. Peter Gauweiler
Peter Gauweiler
Peter Gauweiler is a German politician, and a member of Bavaria's Christian Social Union in the German Bundestag. Since 2006, Gauweiler is the Chairman of the Sub-Committee on Foreign cultural and educational policies of the Foreign Affairs Committee of the German Bundestag...

, a principal at the targeted law firm, was quoted as saying "I expect the appropriate authorities including state prosecutors and the bank's oversight agencies will conduct a full investigation."

In May 2009 Deutsche Bank informed the public that the executive management learned about possible violations which occurred in past years of the bank's internal procedures or legal requirements in connection with activities involving the bank's corporate security department. Deutsche Bank immediately retained the law firm Cleary Gottlieb Steen & Hamilton in Frankfurt to conduct an independent investigation and informed the German Federal Financial Supervisory Authority (BaFin)
BaFin
The Federal Financial Supervisory Authority better known by its abbreviation BaFin is the financial regulatory authority for Germany. It is an independent federal institution with headquarters in Bonn and Frankfurt and falls under the supervision of the Federal Ministry of Finance...

.
The principal findings by the law firm, published in July 2009, are as follows: Four incidents that raise legal issues such as data protection or privacy concerns have been identified. In all incidents, the activities arose out of certain mandates performed by external service providers on behalf of the Bank's Corporate Security Department. The incidents were isolated and no systemic misbehaviour has been found. And there is no indication that present members of the Management Board have been involved in any activity that raise legal issues or have had any knowledge of such activities. This has been confirmed by the Public Prosecutor’s Office in Frankfurt in October 2009. Deutsche Bank has informed all persons affected by the aforementioned activities and expressed its sincere regrets. BaFin found deficiencies in operations within Deutsche Bank’s security unit in Germany but found no systemic misconduct by the bank. The Bank has initiated steps to strengthen controls for the mandating of external service providers by its Corporate Security Department and their activities.

Housing credit bubble and CDO market


Deutsche Bank was one of the major drivers of the CDO market during the housing credit bubble from 2004–2008, creating ~$32,000,000,000 worth. The 2011 US Senate Permanent Select Committee on Investigations report on Wall Street and the Financial Crisis analyzed Deutsche Bank as a 'case study' of investment banking involvement in the mortgage bubble, CDO market, credit crunch, and recession. It concluded that even as the market was collapsing in 2007, and its top global CDO trader was deriding the CDO market and betting against some of the mortgage bonds in its CDOs, Deutsche bank continued to churn out bad CDO products to investors.

The report focused on one CDO, Gemstone VII, made largely of mortgages from Long Beach, Fremont, and New Century, all notorious subprime lenders. Deutsche Bank put risky assets into the CDO, like ACE 2006-HE1 M10, which its own traders thought was a bad bond. It also put in some mortgage bonds that its own mortgage department had created but couldn't sell, from the DBALT 2006 series. The CDO was then aggressively marketed as a good product, with most of it being described as having A level ratings. By 2009 the entire CDO was almost worthless and the investors (including Deutsche Bank itself) had lost most of their money.

Gregg Lippman, head of global CDO trading, was betting against the CDO market, with approval of management, even as Deutsche was continuing to churn out product. He was a large character in Michael Lewis' "The Big Short
The Big Short
The Big Short: Inside the Doomsday Machine is a 2010 non-fiction book by Michael Lewis about the build-up of the housing and credit bubble during the 2000s...

", which detailed his efforts to find 'shorts' to buy Credit Default Swaps for the construction of Synthetic CDOs. He was one of the first traders to foresee the bubble in the CDO market as well as the tremendous potential that CDS offered in this. As portrayed in the book "The Big Short" of Michael Lewis, Lipmann in the mid of the CDO and MBS frenzy was orchestrating presentations to investors, demonstrating his bearish view of the market, offering them the idea to start buying CDS, especially to AIG in order to profit from the forthcoming collapse. As regards the Gemstone VII deal, even as Deutsche was creating and selling it to investors, Lippman emailed colleagues that it 'blew', and he called parts of it 'crap' and 'pigs' and advised some of his clients to bet against the mortgage securities it was made of. Lippman called the CDO market a 'ponzi scheme', but also tried to conceal some of his views from certain other parties because the bank was trying to sell the products he was calling 'crap'. Lippman's group made money off of these bets, even as Deutsche overall lost money on the CDO market.

Deutsche was also involved with Magnetar Capital
Magnetar Capital
Magnetar Capital is a hedge fund based in Evanston, Illinois. Among its many activities, the firm was actively involved in the collateralized debt obligation market during the 2006–2007 period...

 in creating its first Orion CDO. Deutsche had its own group of bad CDOs called START. It worked with Elliot Advisers on one of them; Elliot bet against the CDO even as Deutsche sold parts of the CDO to investors as good investments. Deutsche also worked with John Paulson, of the Goldman Sachs
Goldman Sachs
The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...

 Abacus CDO controversy, to create some START CDOs. Deutsche lost money on START, as it did on Gemstone.

Performance

Year 2009 2008 2007 2006 2005 2004 2003
Net Income €5.0bn €-3.9bn €6.5bn €6.1bn €3.5bn €2.5bn €1.4bn
Revenues €28.0bn €13.5bn €30.7bn €28.5bn €25.6bn €21.9bn €21.3bn
Return on Equity
Return on equity
Return on equity measures the rate of return on the ownership interest of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity . ROE shows how well a company uses investment funds to generate earnings growth...

18% 29% 30% 26% 16% 1% 7%
Dividend
Dividend
Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be distributed to...

0.75 0.5 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 recognized for this change and was named International Financing Review's Bank of the Year twice in a three year period, in 2003 and 2005. It has also won the prize in 2010.

For the 2008 financial year, Deutsche Bank reported its first annual loss in five decades., despite receiving billions of dollars from its insurance arrangements with AIG
AIG
AIG is American International Group, a major American insurance corporation.AIG may also refer to:* And-inverter graph, a concept in computer theory* Answers in Genesis, a creationist organization in the U.S.* Arta Industrial Group in Iran...

, including $11.8bn from funds provided by US taxpayers to bail out AIG.

October 2011: Based on a preliminary estimation from the European Banking Authority
European Banking Authority
The European Banking Authority is a regulatory agency of the European Union headquartered in London, United Kingdom. Its activities include conducting stress tests on European banks to increase transparency in the European financial system by identifying weaknesses in banks' capital structures...

 (EBA), Deutsche Bank AG needs to raise capital about 1.2 billion euros ($1.7 billion) as part of a required 9 percent core Tier 1 ratio after sovereign debt writedown starting in mid-2012.

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
Chief risk officer
The chief risk officer or chief risk management officer of a corporation is the executive accountable for enabling the efficient and effective governance of significant risks, and related opportunities, to a business and its various segments. Risks are commonly categorized as strategic,...

); Anshu Jain (Corporate and Investment Banking); Jürgen Fitschen (Regional Management); Rainer Neske (Private & Business Clients); Hermann-Josef Lamberti
Hermann-Josef Lamberti
Hermann-Josef Lamberti is a German banker and current Chief Operating Officer of Deutsche Bank.Lamberti holds a Diplom degree in business administration from the University of Cologne. He worked with Deloitte & Touche and IBM before joining Deutsche Bank in 1999. Since 2002 he holds the position...

 (Chief Operating Officer
Chief operating officer
A Chief Operating Officer or Director of Operations can be one of the highest-ranking executives in an organization and comprises part of the "C-Suite"...

) and Stefan Krause
Stefan Krauße
Stefan Krauße is an East German-German luger who competed from the mid 1980s to 1998...

 (Chief Financial Officer
Chief financial officer
The chief financial officer or Chief financial and operating officer is a corporate officer primarily responsible for managing the financial risks of the corporation. This officer is also responsible for financial planning and record-keeping, as well as financial reporting to higher management...

).

The Group Executive Committee is the Management Board plus the heads of the bank’s other business areas, namely: Kevin Parker (Asset Management); and Pierre de Weck (Private Wealth Management).

The Supervisory Board
Supervisory board
A supervisory board or supervisory committee, often called board of directors, is a group of individuals chosen by the stockholders of a company to promote their interests through the governance of the company and to hire and supervise the executive directors and CEO.Corporate governance varies...

 of the bank is chaired by Clemens Börsig.

Structure



Deutsche Bank’s mission statement is: “We compete to be the leading global provider of financial solutions, creating lasting value for our clients, our shareholders, our people and the communities in which we operate” The bank’s business model rests on two pillars: the Corporate & Investment Bank (CIB) and Private Clients & Asset Management (PCAM).

CIB


In little over a decade, Deutsche Bank’s Corporate and Investment Bank (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 sells and trades 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.

However, from 2004/5 Deutsche Bank embarked on a programme of cost reduction, initially axing 6,400 jobs in London, Frankfurt and elsewhere. In November 2008, acting in response to the credit crisis, the Bank announced a further staff reduction, axing 1 in 7 of its traders, a loss of 900 jobs, mainly in London and New York.

Global Banking comprises a major Merger & Acquisitions
Mergers and acquisitions
Mergers and acquisitions refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or...

 (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
Initial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...

, 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 fivefold in recent years and as of 2010 has become 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 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 functions as the bank’s private banking arm, serving high net worth individual
High net worth individual
A high-net-worth individual is a person with a high net worth. In the private banking business, these individuals typically are defined as having investable assets in excess of US$1 million. As explained below, the U.S...

s 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.

Communication


Early understanding of modern communication tools has contributed to create the international recognition Deutsche Bank enjoys . In 1972 the bank created the world-known blue logo "Slash in a Square" - designed by Anton Stankowski
Anton Stankowski
Anton Stankowski was a German graphic designer, photographer and painter. He developed an original Theory of Design and pioneered Constructive Graphic Art. Typical Stankowski designs attempt to illustrate processes or behaviours rather than objects...

 and intended to represent growth within a risk-controlled framework.

Acquisitions

  • Morgan, Grenfell & Company, 1990.
  • Bankers Trust
    Bankers Trust
    Bankers Trust was an historic American banking organization. The bank merged with Alex. Brown & Sons before being acquired by Deutsche Bank in 1998.-History:A consortium of banks created Bankers Trust to perform trust company services for their clients....

    , 30 November 1998.
  • Scudder Investments, 2001
  • RREEF, 2002
  • Berkshire Mortgage Finance, 22 October 2004.
  • Chapel Funding (now DB Home Lending), 12 September 2006
  • MortgageIT
    MortgageIT
    MortgageIT is a residential mortgage banking company that was founded in 1988 and is headquartered in New York City. By 2004, the company had become one of the top mortgage lenders in the nation. Also, in 2004, MortgageIT became a wholly owned subsidiary of MortgageIT Holdings, a self-administered...

    , 3 January 2007
  • Sal. Oppenheim
    Sal. Oppenheim
    Sal. Oppenheim jr. & Cie. AG & Co. KGaA is a European Private Bank, currently headquartered in Cologne, Germany. It manages and administers €138 billion of assets and employs around 3,800 employees in more than 30 sites in Germany and Europe...

    , 2010
  • Deutsche Postbank
    Deutsche Postbank
    Deutsche Postbank AG is a German retail bank with headquarters in Bonn. Postbank was formed from the demerger of the postal savings division of Deutsche Bundespost in 1990. It became a wholly owned subsidiary of Deutsche Post in 1999, and was partially spun out on the Frankfurt Stock Exchange in 2004...

    , 2010

Notable current and former employees

  • Hermann Josef Abs
    Hermann Josef Abs
    Hermann Josef Abs was a German banker. He was a member of the board of directors of Deutsche Bank from 1938 - 1945...

     – Chairman (1957–67)
  • Sir John Craven
    Sir John Craven
    Sir John Craven is a director of Reuters and formerly Deutsche Bank and chairman of Deutsche Morgan Grenfell Group plc....

     – Financier in London
  • Michael Cohrs
    Michael Cohrs
    Michael Cohrs is an American financier. He was Co-head of Investment Banking and head of Global Banking at Deutsche Bank. He was also a member of the Group Executive Committee and the Management Board.Cohrs holds a B.A...

     – Head of Global Banking 2002-2010
  • Alfred Herrhausen
    Alfred Herrhausen
    Alfred Herrhausen was a German banker and Chairman of Deutsche Bank. From 1971 onwards he was a member of the bank's board of directors....

     – Chairman (1971–89)
  • Karl Kimmich
    Karl Kimmich
    Karl Kimmich was a German banker. From 1933 to 1942 he was member of the executive board of Deutsche Bank and from 1942 to 1945 chairman with the same firm.- Early life :...

     – Chairman (1942–1945)
  • Hermann Wallich
    Hermann Wallich
    Hermann Wallich was a German Jewish banker.Together with Georg von Siemens, he co-founded Deutsche Bank....

     – Co-founder and director (1870–1893)
  • Georg von Siemens
    Georg von Siemens
    Georg von Siemens was a German banker and liberal politician.He was born on 21 October 1839 in Berlin. Georg von Siemens is a nephew of the inventors and industrialists Werner, William, and Carl von Siemens...

     – Co-founder and director (1870–1900)
  • Boaz Weinstein
    Boaz Weinstein
    Boaz Weinstein is a notable derivatives trader and hedge fund manager. He was born to Israeli and American parents. He first enrolled in a chess workshop at the age of five and earned the title of National Master by the time he was sixteen. He is also a skilled poker and blackjack player. In...

     – Derivatives trader
  • Anshu Jain – Head of Corporate and Investment Banking

See also


  • European Financial Services Roundtable
    European Financial Services Roundtable
    The European Financial Services Roundtable is a European organization, located in Brussels, Belgium, of financial service companies to provide a voice on policies of the European Union related to financial matters...

  • Deutsche Bank Prize in Financial Economics

External links