DB annual report 2017

The report in full you can find here and for my previous summary of the DB annual report 2016 then please click on that link and to find out more about DB then visit DB analysis 2017.

The C/I is improving and was now at 93.4% and once again for the third year in a row they published a loss. This time it was-751 million €. So one can pretty much conclude that the C/I is meaningless to follow for DB since it has no meaning in terms of them starting to have some earnings. If we look at the income statement below then we see that their interest income decreased one step further 24 billion compared to 25.6 billion that they received last year. same trend as with Coba. I truly wonder what the German banks are up to. The CEO has now been forced out and we are back to having a German CEO that have spent his entire life in DB. I have mixed emotions about this and in my opinion it is time for the chairman to throw in the towel. I am generally chocked that they have not managed to remove more full time employees from DB it is almost as if it is a governmental institution. In general I am against massive workforce cuts but in the case of DB I suspect this should have been done directly when the financial crisis hit almost 10 years ago.

Conclusion: DB is still performing very poorly. Their internal hire of the new CEO feels like grasping for a needle in a haystack. It is time for the chairman to go and I will remain as a grumpy shareholder, by now, for the sixth year in a row.

Analysis of Coba 2018

Company: Commerzbank 

ISIN DE000CBK1001 | WKN CBK100 

Business: A German bank. Their five pillars are: Private Customers (accounts, credits, wealth management etc.), Mittelstandbank (medium sized companies as well as institutions), Central & Easter Europe (mBank big in Poland), Corporate & Markets (Corporate finance, equity, currencies etc.) and finally Non-Core Assets (Real Estate and ship-building). They actually only claim to have four pillars but I prefer to add their "bad bank", the NCA, as the fifth.

Active: Claim presence in 50 countries. Europe with Germany and Poland the biggest. 

P/E: 85

Here you can find the previous analysis of Coba 2017. 

The P/E for Commerzbank is a blast with 85 and the P/B is still good with 0.5 which, all considered, gives thumbs done from Graham. Earnings to sales is at 2% which is bad, the ROE is laughable with 0.5% and the book to debt ratio is nothing to sneer at with 0.7.

In the last five years they have kept showing a wonderful decline in revenue which by now corresponds to a yearly revenue loss of -9.6%. This gives us a motivated P/E of 8 which means that Commerzbank is highly overvalued by the market.

They pay no dividends but they keep talking about it.

Conclusion: Graham says no and so do I. Only good value is the P/B and that is just not enough. The day I step out of the German banks it will be like a stone leaving my heart. I will remain as a grumpy shareholder for now.

Coba annual report 2017

For the report in full then please click here and for the previous brief summary then please visit Coba annual report 2016 and to find out more about Commerzbank then please go to analysis of Coba 2017.

The only thing that kept entering my mind when reading the report from Commerzbank was "Ops, I did it again... etc. etc.". I seriously do not know for which year in a row that the revenue has decreased. It is a never ending story. They claim that the restructuring is now finally done. Do I believe that? No, I do not. Give them another month and it will be time for a new restructuring plan. They congratulated themselves for the growth of mBank in Poland. It grew so well during 2016 and even better in 2017 that... was only slightly hampered by the loan losses. Ok, to me that means that they are growing like crazy by giving loans and credit to people that are at high risk. So the "growth" from 2017 will be punished in 2018. It is sad, sad, sad to read these kind of things.

Looking at the financial statement below then we see that the interest income dropped, happily so did the expenses and the bottom line is a sad story of only 154 millions in profits which is 44% less than the earnings in 2016. Well done! Pad on the shoulder and all that.

Conclusion: Commerzbank have not managed to sort out their shit in pretty much 10 years now since the financial crisis. Should they be allowed to survive when they are so incompetent? Swedish banks, please step into the German market to push this German incompetence to either die or be truly forced to improve improve. I will remain a grumpy shareholder.

Analysis of BP 2018

Company: British Petroleum 

ISIN GB0007980591 | WKN 850517 

Business: A British oil giant. They are divided into two business units which are: Upstream (extracting gas and oil) and Downstream (fuels, lubricants and petrochemicals). They currently have five brands: BP(oil and gas), Aral (gas stations where I buy all my petrol), Castrol (lubricants), ampm (convenience stores) and Wild Bean Café (cafés). 

Active: 70 countries world wide employing around 74,000 people (they still claim this on their homepage)

P/E: 43.7

Here you can find the previous analysis of BP 2017.

The P/E of BP is still too high with 43.7 even though it has "normalized" a little and the P/B is up at 1.5 which is great. Still from Graham this is a no go. The earnings to sales are silly low with only 1% as is the ROE with 3.4%. The book to debt ratio are ok with 0.6.

In the last five years they have seen a massive decline in revenue, -8.5%, per year which is bad and gives us a motivated P/E of around 8 which means that BP is overvalued by the market considering their earnings.

They pay out a very nice dividend of 5.7% which does however correspond to almost 250% of their earnings so at some point they need to get themselves sorted out to keep sustaining these dividends OR make a dividend cut.

Conclusion: Graham clearly says no and I am undecided. Considering the latest oil price increases the future does indeed start to look better for BP but it is something that is completely out of their control and on top of that we do not know if it will remain this high or increase for that matter. It could just as well decrease to previous levels and that will have a massive impact on BPs earnings. Only two things are good and that is P/B and dividends. I will remain as a grumpy shareholder.

BP annual report 2017

For the report in full please click here and to see the previous summary regarding BP annual report 2016 or why not take a look at the latest analysis of BP 2017. 

The chairman's as well as the CEO's letter only contained happiness. They claimed that it was an excellent year... well... I say... They are still not up in earnings to cover the dividends that they pay out and without the price increase of oil then I am sure that the letter would not be so joyful.

If we take a look at the financial statement below then we see that the revenue did indeed increase (higher oil price so external effect), we also see that the purchase costs increased substantially so they did not manage to control that better but they did however manage to decrease their production and manufacturing expenses which is good.

Conclusion: The leaders of BP are happy about their accomplishments during 2017. I am less pleased. The chairman of the board will step down sometime during 2018 and we will have to see who takes over. I will remain as a grumpy shareholder.