Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Deutsche Bank Sells Argentine Unit As Part Of Overhaul Drive

Published 08/28/2016, 09:33 PM
Updated 07/09/2023, 06:31 AM

In line with its strategy to streamline global operations, Deutsche Bank AG (DE:DBKGn) (NYSE:DB) inked a deal to sell its Argentine subsidiary, Deutsche Bank S.A, to Banco Comafi S.A. Financial. Terms of the transaction remained undisclosed.

The deal is expected to be closed in first half of 2017. However, the German banking giant will continue to offer services to government, corporate and institutional clients in Argentina through its global and regional centers.

Karl von Rohr, the Chief Administrative Officer at Deutsche Bank, who is overseeing the bank’s Global Footprint Rationalization Program stated, “The sale of our subsidiary in Argentina is another mark of the progress we have been making towards our Strategy 2020 goal of becoming simpler and more efficient”. Rohr further added, “I am pleased with the progress of the program to date. We are also well on track in executing our footprint rationalization plans in the other countries that were announced in October of last year.”

Following the success of its Strategy 2015+, Deutsche Bank is now focused on the successful execution of Strategy 2020, which was unveiled last year. The new strategy aims to simplify the bank’s business model, reduce complexity, risk and costs, and boost capital position. It outlines several initiatives including repositioning investment banking, reorganizing retail business, reducing workforce and trimming the geographic footprint.

Apart from Argentina, Deutsche Bank aims to close onshore operations in several other countries like Chile, Mexico, Peru, Uruguay, Denmark and New Zealand. It also plans to move trading activities in Brazil to global and regional locations.

Bottom Line

While the bank is expediting restructuring efforts, profitability of Deutsche Bank – one of the largest financial institutions in the world – as measured by total assets (€1.80 trillion as of Jun 30, 2016), remains under pressure due to a stressed operating environment with negative interest rates, a sluggish European economy and global headwinds. Management continues to see a challenging revenue environment in 2016, especially post the Brexit episode.

Also, while the company expects to settle significant cases this year, litigation headwinds are not likely to ease any time soon as the bank continues to struggle with numerous lawsuits and regulatory proceedings in and outside Germany. Notably, year to date, Deutsche bank lost more than 40% on the NYSE.


Deutsche Bank currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the foreign banks include KB Financial Group, Inc. (NYSE:KB) , Australia & New Zealand Banking Group Limited (OTC:ANZBY) and Bank Itaú Unibanco Holding S.A. (NYSE:ITUB) , each carrying a Zacks Rank #2 (Buy).

DEUTSCHE BK AG (DB): Free Stock Analysis Report

BANCO ITAU -ADR (ITUB): Free Stock Analysis Report

AUST&NZ BKG-ADR (ANZBY): Free Stock Analysis Report

KB FINL GRP-ADR (KB): Free Stock Analysis Report

Original post

Zacks Investment Research

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.