Top 3 Financial Stocks: Deutsche Bank
Deutsche
Bank shares have dropped by 75% over the last six years. The largest German
financial conglomerate lost ground after the debt crisis in the Eurozone when
negative interest rates hit profit margins badly. Now, the situation is
changing as the European Central Bank (ECB) may raise interest rates to 2% by
the end of 2022. Deutsche Bank estimates that would bring an additional €700
million in 2022 and a further €2.5 billion in 2025. According to DB CFO’s
estimates, the revenue may be generated between €26 billion and €27 billion.
ROTCE, or return
on average tangible common shareholders’ equity ratio that is computed by
dividing net earnings applicable
to common shareholders by average monthly tangible common shareholders' equity,
may hit 8% this year and 10% until2025. Rising interest rates led to an
increase of deposits, even to a larger amount that was expected by the
management in early 2022. If the target of increased deposits is met over the coming years it may mean that
DB share prices may more than double.
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