International Banking

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Recommended: The role of capital in banks

1. Compare Deutsche Bank in 2002 to Deutsche Bank in 2012. How has the orientation of Deutsche Bank changed over time, in terms of business segments and global nature?
To compare Deutsche Bank in 2002 to 2012 the factors that will be examine are:
C -Capital adequacy
A - Asset quality
M - Management quality
E - Earnings
L - Liquidity
S - Sensitivity to Market Risk

Capital adequacy:
Capital adequacy ratios (CARs) are a measure of the amount of a bank's core capital expressed as a percentage of its risk-weighted asset.
Capital adequacy ratio is define as:

In other words capital adequacy is the percentage ratio of a financial institution to measure its strength and stability.
2002
In 2002 Deutsche Bank had a total amount of 397,279 from loans (before allowance for loan losses)
2012
In 2012 it decreased approximately 43% in total of 171,620. In 2002 the bank's capital adequacy was more profitable compared to 2012.

Assets:
In 2002 the total assets of the bank was 2,2012. With more than a 50% increase in 2012 it increased to 758,355. The total amount of assets increase may be as a result of the increase of the total amount of branches. In 2002 Deutsche had a total of 1,711 branches, in 2012 however it increased by 1,273 almost double the amount in 2002.

Management: The Management are jointly accountable for the management of the company. In 2002 the bank was governed under one CEO, Josef Ackermann. The management structure changed in 2012, two new CEO’s were appointed Anshu Jain, head of investment banking and Juergen Fitschen, head of the German business.

Earnings: The bank saw an increase from € 0.25 in 2002 to a € 0.64 in 2012.

Liquidity: Liquidity of the bank literately refers to amount of highly liquid assets t...

... middle of paper ...

...ECD Journal: Financial Market Trends, Volume 2010 - Issue 1, © OECD 2010
Basel Committee on Banking Supervision, (2010), “Basel III: A global regulatory framework for more resilient banks and banking systems”, rev June 2011 http://www.investopedia.com/terms/r/returnonequity.asp http://www.fma.org/Luxembourg/Papers/CO-CEO_Executive_Compensation.pdf http://www.ehow.com/info_8792222_disadvantages-coleadership.html http://www.forbes.com/sites/quora/2013/08/16/what-is-the-current-state-of-the-eurozone-debt-crisis/ http://www.reuters.com/article/2014/01/29/us-deutschebank-idUSBREA0S28520140129 http://www.investopedia.com/terms/p/price-earningsratio.asp

http://www.bis.org/publ/work412.pdf

Cetorelli N and L Goldberg (2012): “Liquidity management of US global bank:
Internal capital markets in the Great Recession”, Journal of International Economics,
88, pp 299–311.

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