Deutsche Bank: A strategic Bet Ahead Of Expected Positive 2017

Deutsche Bank's capital hike 2017Headquarters of Deutsche Bank

Deutsche’s capital base ratio (currently at 11.9%) will increase to 14.1% (pro-forma) after its successful capital hike (8 billion euros). This will put it at the highest level in relation to its peers (11%/12%).

In addition, the bank is trading at attractive valuation multiples (P/BV at around 0,5x), substantially lower than the sector average (P/BV of 0,8/0,9x).

Interest in Deutsche Bank on the part of big institutional investors has increased. The Chinese group HNA has just become the main shareholder after raising its stake to 9.9% from a previous 4.76%.

Net attributable profit stood at 575 million euros in the first quarter (up 143%) thanks to a rise in revenues (7.346 billion euros in Q1’17 vs 7.068 billion in Q4’16) and the decline in legal costs (-170 million euros vs -1.588 billion in Q4’16 and vs -187 million in Q1’16).

This year, net attributable profit could exceed 2 billion euros compared with losses of 1.402 billion in 2016. This would be a key turning point for the share price.



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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.