• 18 hours 2021 Could Be A Huge Year For Chinese Stocks
  • 2 days Shadowy Brokers Target Easy TikTok Money In New Scheme
  • 3 days Cannabis Sales Are Soaring In The United States
  • 4 days Biden Will Be A Boon For Solar Stocks
  • 5 days The Shroom Boom Is Here To Stay
  • 8 days The Gold Rally Has Finally Run Out Of Steam
  • 8 days Citibank Analyst Predicts $300k Bitcoin By End Of 2021
  • 11 days Bitcoin Lives Up To Its Safe Haven Status In A Big Way
  • 11 days 14 Million People Will Lose Unemployment Benefits On December 31st
  • 13 days Why 12 Million American Millionaires Isn’t Good News
  • 14 days Big Oil Is Paying The Price For Investing In Renewables
  • 15 days The Banking Industry’s $35 Billion Gravy Train Could Disappear
  • 16 days Did Amazon Just Democratize Prescription Drugs?
  • 17 days The Private Space Race Just Got Very Real
  • 19 days Short Sellers Are Willing Big In This Turbulent Market
  • 20 days SpaceX Gets Go-Ahead To Send Humans Into Space
  • 21 days Saudi Arabia Lost $27 Billion In Oil Crash
  • 22 days China’s Big Tech Takes A Hit As Regulators Crack Down
  • 23 days Black Friday Could Be Retailers’ Only Hope
  • 24 days Why You Should Not Dump Your Stay At Home Stocks Just Yet
What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

  1. Home
  2. Markets
  3. Other

Diving Into Deutsche Bank's 'Passion to Perform' Balance Sheet

Deutsche Bank shares have collapsed to lows deep under crisis lows and collapse of Lehman in the Great Financial Crisis. What's going on?

An investigation of Deutsche Bank's "Passion to Perform" balance sheet provides the clues.

Deutsche Bank Interim Report

The above clip from Deutsche Bank's First Quarter 2016 Statement.

Details in red from page 61 (PDF page 63) of the 126 page report.


Key Liabilities

  • €559 billion deposits
  • €562 billion negative derivatives
  • €151 billion long term debt


World's Most Systemically Dangerous Bank

Zero Hedge commented on the World's Most Systemically Dangerous Bank.

Here's the key chart.

Systemic Risk among GSIBs


Deutsche Bank Share Price

Deutsche Bank Monthly Chart 2001-2016


What Went Wrong?

Deutsche Bank's price to book value is 0.251.

Effectively the market suggests Deutsche Bank is worth 75% less than book value. Why?

  1. Is it derivatives?
  2. Are bank assets over-inflated?
  3. Other assets prices inflated?
  4. Liabilities understated?
  5. What about Brexit?

Brexit is the easiest explanation to throw out. Share prices started collapsing a second time starting at the beginning of 2014.

The bank has always been heavy in derivatives. Although recent activity may have led to losses or more scrutiny, it's relatively easily to discard that as the primary answer.


Banking Sector Malaise

Instead of pondering the obvious problems, what about other things?

  1. Targe2 imbalances starting to matter
  2. Italian banking woes starting to matter
  3. Rising chance that Eurosceptic leaders take control of Italy.
  4. What if Eurozone intrabank balances are in question?

My best guess is that Deutsche Bank share prices reflect all of the above but something in the second set of reasons, or something we still do not fully understand is the primary reason behind the collapse.


Related Articles

 

Back to homepage

Leave a comment

Leave a comment