Friday, November 6, 2015

DB report Q3 2015


DB, Q3, 2015, report, front page

When whatever hits the fan it spreads. It took DB six years and the kicking of three CEOs before things started to go in a direction that I find more acceptable. The new CEO is pulling all the joker cards he has available by taking massive impairment costs (in the size of 5.8 billion €) as well as deciding to cut dividends for probably the next two years. The market was not pleased and of course neither am I  but if this will lead to a turn around then in the end I will be pleased.


The report in full you can find here and for my previous summary of the DB report Q2 2015 then please click on that link and to find out more about DB then visit DB analysis 2015.

At some point one can really start to ask questions regarding the impairment costs... on one hand they want to sell the Postbank which they also will do and yet they take a huge intangible asset write down as well as Goodwill due to the Postbank brand. I mean... Postbank is well known in Germany if it would be back out on the market again then why should they use a different name? I might stretch out my neck too far now but those two impairment costs I consider to be faked so that they can very quickly "generate earnings" when the sale is accomplished. Future will tell.

Below is the income statement and well... it leads to mixed emotions. Revenues are up by around 10% so that is pretty good the costs are kind of in control also until wooops we get to the impairment cost of 5.8 billion €. The "funny" thing is that the end results (before taxes) is -6.1 billion so even WITHOUT this massive impairment cost DB would have made a really bad quarter with around -300 million € calculating roughly. By the look of it they had a -542 million issue with their equity method investments coming from the Hua Xia Bank that is no longer treated as a strategic investment and, hear and behold, the fair value was below the carried value.


DB, Q3, 2015, income statement


Only as a personal entertainment I add also this cut out table with the key figures for DB. They are now at a C/I ratio of over 110%. That is just bad to put it simply. Coba (Commerzbank) that are still NOT doing well are down around 70% and GOOD banks are down around 50%. The book value is however still making DB look very cheap and it is the reason why I am where I am today.


DB, Q3, 2015, key figures


Conclusion: DB is now taking the steel wool shower which includes cleaning out crooked bosses and members of the board. My question is still... are they replaced by honest people or crooks loyal to the new CEO? I will remain a grumpy shareholder and do not look forward to a big dividend loss next spring but I prefer to get no dividends than to see a company selling shares (to selective investors) with one hand to be able to pay out dividends with the other. That is a fools game and I am glad that now stopped and hopefully will not start again.

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