Deutsche Bank and the Road to Basel III Case Solution

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? 

Deutsche Bank became the most prominent European investment bank by the late 1980s, especially in the areas of securities, derivatives, and foreign exchange. Additionally, opportunities arose for Deutsch’s commercial banking activities because of the German model of bank-dependent financing. Deutsche Bank's international footprint grew by 12 nations in the Asia-Pacific region and 4 in Latin America/the Caribbean/Europe as a result. Deutsche Bank capitalised on the region's political upheaval in the 1990s by expanding its Investment Banking operations to 70 nations via a series of mergers and acquisitions. From 2002-2012, globalisation and the widespread use of the Internet allowed all banks to expand internationally rapidly, and this increased competition for Deutsche Bank. As a result of dramatic growth in Investment Bank assets in 2005, Investment Banking income became Deutsche Bank's primary source of net revenue between 2002 and 2011. 

This further establishes Deutsche Bank as the leading retail bank in Europe. Deutsche Bank had surpassed JPMorgan Chase in terms of U.S. fixed-income trading by July 2012. On top of that, Deutsche Bank was the frontrunner on the European Equity Research platform. There is little question that the bank's current success can be traced back to the numerous wise and strategic choices taken by Deutsche Bank over the years. Deutsche Bank's strategy of expanding into new foreign markets through mergers and acquisitions successfully attracted new clients and expanded rapidly during and after many economic downturns. When Deutsche Bank expected losses in its investment banking division due to the Great Financial Crisis and the eurozone debt crisis, the decision to acquire Postbank paid off handsomely.

2. What does the historical financials tell us about Deutsche Bank's profitability ratios in terms of ROA/ROE for the period up to 2011?

Profitability ratios allow Deutsche Bank's management to assess the bank's performance in relation to that of its rivals in the banking sector, intending to develop plans to enhance both profitability and market share. The success of Deutsche Bank's response to Basel III capital adequacy standards and the bank's ability to stay competitive during the eurozone debt crisis hinges on the successful implementation of these initiatives. Since 2002, globalisation, the expansion of the Internet, and a concentration on worldwide Investment Banking have all contributed to a dramatic increase in Deutsche Bank's return on equity (ROE), which soared to 26.72% in 2006.