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.