Deutsche Bank SWOT & PESTLE Analysis

Strength

1. Structured Organization to Aid growth: The management board has structured the organization into a matrix structure comprising of corporate divisions, infrastructure divisions and regional management divisions. According to the strategy 2020 the corporate divisions have been restructured into 5 divisions, the infrastructure allows the corporate divisions to use the resources jointly whereas the regional management division covers the regional responsibilities worldwide allowing Deutsche to grow and acquire new clients whereas at the same time have operations or dealings with existing customer in most countries in the world.

2. Emphasis on Clients: Deutsche is looking deeply at the client coverage model and is rationalizing its business by dropping clients which involve high risk or offer extremely low returns. The client on boarding process and the KYC procedures has been strengthened though.

3. Alignment between performance and pay: Deutsche Bank is working hard to align the long term performance of the institution with the compensation offered. Hence the proportion paid or scheduled to be paid compensation comprised of 49% variable compensation(VC) component. To further support this move 33% of this component was given in shares. Thus Deutsche is working hard to keep the employees satisfied and attract and retain the best talent. According to the new compensation structure which was introduced in the year 2016, Deutsche places stronger emphasis on fixed compensation as well as well-defined between group performance and individual variable component decisions.

4. Risk Culture Training Programs: To strengthen the risk culture there has been continuous refinement taking place in the mandatory Risk Culture training curriculum. There was an enrolment of 550,792 people across the Risk Culture courses as of October 2015. The Risk Culture messages continue to be incorporated at the employee inductions, graduate onboarding and regional promotion events.

Weakness

This section is available only in the 'Complete Report' on purchase.

Opportunity

This section is available only in the 'Complete Report' on purchase.

Threat

1. Impact of Poor Trading environment: The revenues of the bank for the year 2016 had been impacted by the changing trading environment and also the low interest rate environment. The poor earnings environment is expected to be prolonged by European Central Bank's continued very low policy rate in 2017. The immediate impact to the above is that traditional corporate deposits are becoming less attractive because of limited returns and carries an intangible costs on bank’s balance sheet.

2. Uncertainty in Eurozone and Brexit to slow growth: The outlook for Eurozone and the UK economy remains quite challenging in the wake of key elections in major EU Member States and the uncertainty of the Brexit repercussions. GDP growth In the Eurozone is set to slow down to 1.3% in 2017. Further an unstructured exit of the United Kingdom from the European Union and efforts for regional independence such as Catalonia in Spain may put the region’s economy at risk. These factors will majorly impact the business growth of Deutsche Bank.

Political

1. Compliance issues regarding political sanctions: Iran was sanctioned under US laws for its nuclear activities and political tensions with the United States. Syria was also subject to sanctions after its internal civil war started in 2011. Deutsche Bank was fined $258m (£167m) by US regulators for working with these counties during the sanctions era. These political development shave cause major business losses to the Deutsche Bank. However it needs to strengthen its compliance systems as per the US sanctions, as United States is a major market for the bank and Germany and United States enjoy strong political rapport.

Economic

1. Uncertainty in Eurozone and Brexit to slow growth: The outlook for Eurozone and the UK economy remains quite challenging in the wake of key elections in major EU Member States and the uncertainty of the Brexit repercussions. GDP growth In the Eurozone is set to slow down to 1.3 % in 2017. The growth may however experience an upward push if the European Central Bank (ECB) adopts a supportive monetary policy stance. Further an unstructured exit of the United Kingdom from the European Union and efforts for regional independence such as Catalonia in Spain may put the region’s economy at risk. These factors will majorly impact the business growth of Deutsche Bank.

Social

This section is available only in the 'Complete Report' on purchase.

Technological

This section is available only in the 'Complete Report' on purchase.

Legal

This section is available only in the 'Complete Report' on purchase.

Environmental

1. Promoting internal and external sustainability: Environmental sustainability with regards to usage of raw materials is critical for consumer-centric organizations such as Deutsche Bank. The bank actively promotes investment in clean and efficient methods of energy supply such as development of renewable technologies and as a financial intermediary and supports its clients in their path to sustainability. Further, Deutsche Bank’s business operations have been climate neutral since 2013.