Corporate Banking & Securities


The investment banking environment in 2012 and 2013 will be impacted by new regulation and ongoing macro concerns over Europe’s sovereign debt crisis, potential slowdown in Emerging Markets and the sustainability of the U.S. recovery. This means that volatility will remain a constant theme but we believe that capital markets activity will be robust. Corporate Finance fee pools should increase in 2012, subject to normalization of market conditions, as corporate balance sheets remain healthy and financial institutions are likely to further increase funding and capital levels. Trading volumes may increase if investor sentiment improves. However, margins may face downward pressure in products with lower capital requirements (e.g., foreign exchange and cash equities) as competition increases, while more capital intensive structured products may see margins rise as a result of some industry participants scaling back due to the impact of new regulation.

Corporate Banking & Securities is expected to continue to benefit from the further integration of the investment bank. This integration, started in 2010, enables us to better service corporate clients across a broad range of products, eliminate duplication across both front office and support functions, and increase collaboration between all areas of the business. We will continue to focus on both client flows and solutions while maintaining strong asset efficiency (especially given upcoming regulatory changes) and minimizing risk exposures.

In Sales & Trading, we expect revenues from flow products such as foreign exchange, money markets, interest rates and cash equities will be affected by ongoing volatility but should remain robust given our leading client market shares, notwithstanding market conditions. In addition we expect to benefit from our continued investments in electronic trading and direct market access platforms. We will continue to focus on our Prime Finance franchise where we have built up a market leading position. Emerging markets trading and commodities will also remain key growth areas as demand increases.

In 2012 and 2013 and assuming that market conditions stabilize we expect the corporate finance fee pool to increase. Debt issuance is expected to increase driven by M&A related activity and financial disintermediation and as financial institutions seek additional term funding and capital, although there may be pressure on corporate fundamentals if global growth slows. We anticipate equity issuance to increase given the large backlog of deals from the second half of 2011 as recapitalization and privatization deals come to market. M&A activity is expected to be robust as a cyclical recovery continues, subject to the assumption that volatility subsides and stability returns. Deutsche Bank is well positioned to capitalize on all these trends and build further momentum in our corporate finance franchise.

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Deutsche Bank Annual Report 2011

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