International Banking

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3. Examine the acquisition of Postbank. What were the aims of Deutsche Bank? Do you agree with this strategy? Presently it is called Deutsche Postbank AG. Postbank was a German retail bank with headquarters in Bonn. Postbank was formed from the demerger of the postal savings division of Deutsche Bundespost in 1990. Deutsche Post retained a controlling stake of 50% plus one share until September 2008, when 30% of this was sold to Deutsche Bank for €2.8 billion. Deutsche Bank gained a majority stake in the firm in December 2010. Deutsche Bank added Post bank’s customers to its German private clients to become the country’s biggest private sector retail bank. Doing this, Deutsche also believe, that the deal will put it among the five largest banks in Europe in terms of the amount of net revenues from domestic retail business. Both in 2007 and 2011 Deutsche Bank reduced leverage. Consequently starting to address capital concerns. Since they lost leverage the bank in 2010, it purchase Postbank. Postbank strengthened Deutsche Bank’s deposit base and gave it an alternative revenue source. The bank had a decrease of approximately 700 billion Euros in the year 2008 and 2009. Deutsche Bank's needed to shed it assets or increase it equity based on retained earrings or raising capital. Deutsche did not want to choose none of these options it was believed that the purchase of Postbank was the best option. I agree with this strategy to purchase Postbank, as currently Postbank has assets on its balance sheet with approximately €230 billion, which is beneficial for the overall bank Furthermore, it strengthened its retail banking presence in European markets, Deutsche Bank used the downturn in investment banking to gain market share as ... ... 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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