This case was named the best finance case of 2013 and it is still relevant for understanding the current situation. Students are the decision makers and have the opportunity to evaluate the various factors affecting a bank’s situation in a changing global industry, such as leverage and credit quality, as well as to discuss the implications on Deutsche Bank and the banking sector more broadly of Basel III, the global regulatory reform. The students also have the opportunity to conduct a valuation of the bank.

Case Study: Deutsche Bank and the Road to Basel III Case F-1695

http://store.darden.virginia.edu/deutsche-bank-and-the-road-to-basel-iii

This case was named the best finance case of 2013 and it is still relevant for understanding the current situation. Students are the decision makers and have the opportunity to evaluate the various factors affecting a bank’s situation in a changing global industry, such as leverage and credit quality, as well as to discuss the implications on Deutsche Bank and the banking sector more broadly of Basel III, the global regulatory reform. The students also have the opportunity to conduct a valuation of the bank.

My Learning Objectives for students:

• raise basic questions around global financial systems and regulatory reform efforts
• analyze a bank’s financial reports to evaluate its position within newly adopted regulations
• consider the role of traditional commercial and investment banks in economies and within society
• use the companies’ financial reports to analyze/interpret financial data

In preparing your write-up, use the case material as background for your research. In some cases, I expect that you do a bit of extra research on the topic. This may include the case’s footnotes and references. In answering some questions, your group must take a position and express and opinion. You must support your opinion with facts, theory, and empirical evidence. I want to see numbers! Be aware: numbers alone do not tell a story. You must analyze the numbers and tell a story around them. Use original sources, for instance reports from international organizations (IMF, WB, BIS, etc), or academic research. Do not use blogs, Wikipedia, Investopedia, or press articles outside the FT, WSJ or the Economist as sources for your research and when expressing your opinion.

Your sources must be properly cited in the bibliography. Using someone else’s wording without quotation marks is considered plagiarism.

In general, I expect that each answer is supported by data analysis. Show your work and clearly refer to the numbers used in your analysis to support your opinion and statements. Please clearly identify in the write-up the question that you are answering (Q1, Q2, etc…).

Instructions for the write-up: at most 3 pages of discussion/analysis (exclusive of the bibliography, charts, tables, etc.), typed in 12 pts with one-inch margins and 1.5 spacing. Please also include an excel worksheet with the data used to answer question 5 (be brief and to the point: do not overflow the file with unnecessary data or with data you do not use in the analysis). The write-up must address ALL questions listed below.

QUESTIONS

Q1 to Q4 refer to the data and period presented in the UVA/Darden Case

1. How has the orientation of Deutsche Bank changed over time in terms of business segments and global nature? Why? In what data/statistics do you observe it? Do you agree with its strategy? Is Deutsche Bank the only bank that has increased its international exposure?
2. What do the historical financial tell us about Deutsche Bank’s profitability ratios on terms of ROA/ROE for the period up to 2011?
3. What is the financial outlook for Deutsche Bank in view of Basel III and the euro zone debt crisis?
4. What is your estimated valuation of Deutsche Bank? Use the P/E and P/TB ratios to value DB’s equity share (remember, use the data from the case)

Q5 refers to the period 2017-2019

https://www.db.com/ir/en/annual-reports.htm

1. What do the historical financials tell us about Deutsche Bank’s profitability ratios in terms of ROA/ROE for the years 2017 to 2019? How does/did Deutsche Bank’s profitability compare to the following peers/competitors: JP Morgan, HSBC, BNP Paribas, Barclays?
2. What is happening to Deutsche Bank today? Are things as bad now as they were in 2009-2011 for Deutsche Bank? Explain similarities/differences and use financial data (pre 2011 vs. post 2011) to support your findings (financial filings, news).
3. What are the big issues Deutsche Bank is dealing with today? What can the bank’s management do/how is it performing? What is the estimated valuation of DB today? What would you advise (in comparison to management’s current performance) and why? Support your opinion and advice with data analysis.

PLEASE PROVIDE AN EXCEL FILE WITH YOUR ESTIMATIONS/NUMBERS/RATIOS, WITH CLEAR REFERENCES TO THE VALUES USED AND A LINK TO THE DATA SOURCES USED IN THE ANALYSIS. You must answer all questions in the write-up!

So, to wrap up, I will need two files from you:

1. Write-up inclusive of ALL questions
2. Excel file re: Q5

Send the electronic file of the write-up IN PDF FORMAT and Excel file (Q5)