3. Deutsche Bank Aktiengesellschaft (NYSE:DB)
Number of Hedge Fund Holders: 14
Deutsche Bank Aktiengesellschaft (NYSE:DB) provides investment, financial, and related products and services to private individuals, corporate entities, and institutional clients worldwide. On November 25, Deutsche Bank Aktiengesellschaft said it was selectively hiring in its deals business in Asia, as activity in parts of the region was seeing strong growth. On October 20, Deutsche Bank said that it had laid off 20 New York-based junior bankers and several senior staff within the lender’s Origination & Advisory business.
On November 11, analyst Amit Goel maintained an Equal Weight rating for Deutsche Bank Aktiengesellschaft (NYSE:DB) stock and raised the price target to EUR 11.50 from EUR 11.
At the end of the third quarter of 2022, 14 hedge funds in the database of Insider Monkey held stakes worth $766.8 million in Deutsche Bank Aktiengesellschaft (NYSE:DB), compared to 16 in the previous quarter worth $934.8 million.
In its Q3 2021 investor letter, Third Avenue Management, an asset management firm, highlighted a few stocks and Deutsche Bank Aktiengesellschaft (NYSE:DB) was one of them. Here is what the fund said:
“Deutsche Bank Aktiengesellschaft (NYSE:DB) (4.5% portfolio weight) – Similarly, Deutsche Bank has in recent years undertaken profound cost-cutting initiatives, albeit, in Deutsche’s case, as a result of the scandal, business underperformance and a need to deleverage. Deutsche Bank, and other investment banks with large fixed-income trading operations, clearly benefited from the pandemic in 2020 as a result of unusually large fixed-income trading volumes and market volatility. This is one of the primary arguments for having trading operations alongside more traditional banking and asset management businesses—i.e., that their business performances are not correlated and strong trading performance can, at times, offset challenges in other parts of the business. And times are still challenging for Deutsche’s more traditional corporate and private banking businesses as a result of the interest rate environment. Clearly, a higher (or even less negative) German rate environment would help, but it must be said that Germany has to be among the least attractive banking markets in Europe. The industry structure is unique and frustrates the ability of private banks to produce profit, which in turn limits the ability to accumulate capital, making the entire system more fragile than it ought to be. We value Deutsche’s various banking business lines accordingly. But, turning back to things Deutsche can control, it is indisputable that Deutsche, under CEO Christian Sewing, has made considerable progress towards its critical cost-cutting, deleveraging and capital accumulation goals. At the outset of our investment in Deutsche, our single largest concern was that the bank’s necessary exit from certain lines of business, along with sizeable headcount reduction in others, could cause clients to seek other relationships with banks offering a full range of services and without any perception of counter-party risk. In a worst-case scenario, the result could have been an erosion of revenue even faster than the cost reduction, possibly precipitating a downward spiral. As we emerge from the pandemic with Deutsche now far down the road of transformation, and clear evidence that it is regaining market share in various lines of business, the largest risks appear to be behind us. To that point, in recent public comments, Deutsche management has indicated that it intends to resume returning excess capital to shareholders in 2022.”
