Deutsche Bank's Financial Crisis: Valuation Analysis and Path to Recovery
This valuation analysis examines Deutsche Bank's deteriorating financial performance following a $14 billion DOJ fine for mortgage-backed securities violations. The article projects a rocky recovery path with continued losses through 2018 before achieving profitability, assuming the bank reaches a 5.85% return on equity by year 5 and eventually recovers to its 9.44% cost of equity by year 10.
Metrics in this report
9.44%%
estimated
Deutsche Bank
$16 billionUSD
total
Deutsche Bank 2014-2015
$14 billionUSD
asserted
Deutsche Bank mortgage-backed securities violations
$6 billionUSD
estimated by bank
Deutsche Bank negotiated settlement expectation
13.74%%
average
All publicly traded banks globally
$17.99 billionUSD
market cap
Deutsche Bank at October 4, 2016
$13.33USD per share
closing price
Deutsche Bank on October 4, 2016
50%%
percentage decline
Deutsche Bank 2012-October 2016
80%%
percentage decline
Deutsche Bank pre-2008 to October 2016
5.85%%
25th percentile
Deutsche Bank projected
14.65%%
actual
Deutsche Bank end of 2015
12.41%%
adjusted
Deutsche Bank after estimated $10 billion fine impact