Deutsche Bank AG is one of the top financial groups in the world and the largest bank in Germany, where it operates about 2,000 retail branch locations. It has another 1,000 branches in more than 70 countries in Europe, the Americas, Asia, the Pacific Rim, and Africa. Deutsche Bank operates through three primary segments: Corporate and Investment Bank, Corporate Investments, and Private Clients and Asset Management. Its massive and far-flung Deutsche Asset Management subsidiary, which includes US-based companies Deutsche Bank Securities, RREEF, and DWS Investments, serves private and institutional clients and has some €527 billion (some $690 billion) in assets under management.
The group's corporate and investment banking segment performs capital markets and corporate banking services, including trade clearing; securities underwriting, trading, and research; mergers and acquisition advisory; foreign exchange trading, and trust and cash management. Corporate investments includes the group's industrial shareholdings and non-strategic holdings.
After losing billions of euros in the worldwide financial crisis of 2008, the company has been seeking to diversify its revenues and increase volume transactions. In order to boost revenues, it also cut back lending and worked to increase retail deposits. Additionally, Deutsche Bank sold some noncore units.
The disciplined strategy has been paying off for Deutsche Bank, as all segments reported increased revenues in 2010. Whereas previously structured debt trading largely drove the group's growth, these activities have slowed down in the weakened company. As such, Deutsche Bank has been making efforts to build its other, more stable, revenue lines. In 2009, the company paid some €3 billion ($4 billion) for a 25% stake in struggling German bank Deutsche Postbank; it upped its interest to more than 50% the following year and bid to buy the bank outright. The addition of Postbank largely contributed to an increase in earnings in 2011 (revenues grew some 23% over the previous year, and profits rose by 81%). Despite its exposure to European sovereign debt, the company ranks among the top global corporate banks and it has a strong balance sheet.
Also in 2010 Deutsche Bank acquired the bulk of European asset manager Sal. Oppenheim Group for about €1 billion ($1.5 billion). The deal aligned Deutsche Bank with one of Germany's strongest private banking brands and boosted its distressed wealth management business. Deutsche Asset Management rolled Sal. Oppenheim's private equity business into the newly created fund of funds firm DB Private Equity, which manages some €6 billion ($8.1 billion) of assets. Deutsche Bank has made a couple of attempts to sell Swiss private bank BHF, a noncore entity acquired with Sal. Oppenheim. The company has also entered discussions for a possible sale with RHJ International subsidiary Kleinwort Benson. And in 2012 Deutsche Bank sold its Deutsche Bank Berkshire Mortgage subsidiary to Ranieri Real Estate Partners and others to focus on its core operations in the US.
Deutsche Bank's once-canceled deal to buy parts of ABN AMRO's commercial banking operations in the Netherlands was finally completed in 2010. The acquisition furthered the company's strategy to expand in Europe. With its sights on the Middle East, the bank formed a shariah-compliant joint venture, Deutsche Gulf Finance, in Saudi Arabia. The unit, which is 60% owned by a group of Saudi investors, offers home financing. Deutsche Bank then acquired a 49.9% stake in New Zealand wealth management firm Craigs Investment Partners, which continues to operate as a standalone subsidiary.
Hoping to take advantage of China's growing economy, the bank established an outpost there in 2008. It also built up its stake in the China-based mutual fund manager Harvest Fund and, in 2009, became the largest single shareholder in Hua Xia Bank (with a 19.99% stake, the maximum allowed for a foreign investor). – less