I am analyzing banks on three different exchanges and looking at the differences with their current balance sheet information over the year with the starting of the economic decline in the US mostly in the mortgage market. I am looking at Deutsche Bank, Barclays, and Citigroup. I will be using Deutsche Bank as my point of focus for two reasons. First of all I want to see the difference in European based company vs. US vs. another European Bank in another country. Second because Deutsche Bank has just opened up in Jacksonville and are in the process of hiring about 1,000 employees over the next year.
Looking at Deutsche Bank’s income statement it shows that they have been steadily growing over the last five years and show no real signs of slowing down. Their stock is very moderately prices (7/23/08 was $59. 95euros a share). Compared to the other 2 banks they are much lower in the amount of outstanding share, but in market capitalization it still holds its own against Barclays and still has some work to caught Citigroup even with Citi’s problems this year. I think with Deutsche Bank is making a really smart and tactical move by coming to Jacksonville with the market the way it is.
They are getting into more of the US market just before it is about to have a big rebound. I don’t think they planned this way, but it is how it currently is. Jacksonville is a growing metropolitan city in both its banking/ financial growth as well as in becoming one of the biggest ports. Looking at Deutsche Bank’s 2007 income statement shows good financial strength moving into this year. They have a rather stable beta at 1. 24 as well as a 6. 20 PE ratio (7/23/2008).
One of the most promising things in the income statement that might go over looked is that it is Euros and with the current exchange rate it helps boost its actual value in US Dollars. Looking closer at the 5 year income statements it is clear that Deutsche Bank is a growing strong company. Looking at the Net Income for 2003 to 2007 there is steady growth. Barclays has had slower growth over the same time period except in 2007 in fell a bit, but comparing both Deutsche Bank and Barclays against Citigroup it is evident the impact of the falling US mortgage market and the big hits it was starting to take.
Citigroup went steady growth with it net income at $21,184 in 2006 to $3,581 in 2007. Looking at this the decline is very clear and with the current year and the falling stock price and big write off the last 2 quarters Citigroup is in a real predicament. Deutsche Bank has taken advantage of the slowing US economy and is moving into Jacksonville. Just since I July to now there stock has increased by almost $5 dollars a share, as well as their PE ratio jumping from 6. 29 to 9. 79. They are on a good track to grow even more this year with the timely move into more US markets.