Emerging from the Mess

FILE - In this Nov. 3, 2009 file photo a person passes the new logo of German Commerzbank at the bank's headquarters in Frankfurt, central Germany. Commerzbank says Thursday, Nov. 7, 2013, third-quarter net income rose by 15 percent to 77 million euros (US dollar 104 million) as it cut costs and took fewer losses on shaky investments set aside for disposal. The figure beat analyst estimates for 44 million euros in net income. The bank's shares jumped 9.4 percent to 10.19 euros and led Germany's DAX blue-chip index in morning trading in Europe. (AP Photo/Michael Probst, File)
  • Why it matters

    Why it matters

    If Deutsche Bank cannot prove to investors and customers that it has cleaned up its act, it will continue to lose money and value, compared to other banks.

  • Facts


    • Deutsche Bank, Germany’s largest bank, announced high losses last week and remains embroiled in numerous expensive lawsuits in the aftermath of the financial crisis.
    • Commerzbank, the second-largest bank in Germany, was bailed out after the financial crisis but has returned to profit after making cuts.
    • Soft factors including reputation, customer loyalty and appeal can form up to 60 percent of a bank’s value according to a study.
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The pecking order among Frankfurt’s banks used to be pretty clear-cut: first came the mighty Deutsche Bank, then came its smaller, weaker competitor, Commerzbank.

Deutsche Bank came through the financial crisis in pretty good shape, bouncing back to quickly earn billions while Commerzbank needed to be restructured – and had to be partially nationalized.

This relationship now appears to be shifting.

The new chief executive of Deutsche Bank, John Cryan, last week announced record losses of €6.8 billion, or $7.38 billion, and persuaded investors to accept two more lost years; shareholders won’t receive a dividend in 2015 and 2016. The supervisory board eliminated last year’s bonus for the whole executive board.

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