Saturday 25 April 2020

Analysis of DB 2020

Logo of DB 2018

Company: Deutsche Bank

ISIN DE0005140008 | WKN 514000

Business: A German bank that now finally after 12 years have taken the decision to make cuts and changes in the organisation and have gone from ~100k to 87k employees. They have four segments: Coprporate bank, Investment bank, Private bank and DWS (asset management).

Active: in 60 countries world wide.

P/E: -15.3

Here you can find the previous analysis of DB 2018.

The P/E for DB is negative with -15.3, which seems to be the normal state for DB, while the P/B is very good with 0.2. The end result is still the same because Graham says no to this one. Earnings to sales and the ROE is negative and being a bank the book to debt ratio is low with only 0.04.

In the last five years they have had a yearly decrease in interest income by -06% and this gives us a motivated P/E of around 6 which means that DB is most likely overvalued by the market.

They pay no dividends.

Future: It is the same story for Deutche bank as it is for Commerzbank. They completely failed to be on the ball when it comes to online banking and for DB that's additionally tried so hard to play with the big asset management boys they have simply put failed miserably and in that process they started to lose their oh, so important private banking accounts. I do not see a bright future for DB and Coba.

Conclusion: Graham would not go for it and neither would I. DB is not a healthy bank and what they have done as of late should have happened back in 2008/2009 and on top of it much more should be done.

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