Deutsche Bank has published today its Annual Report for 2013 consisting of two sections, an annual review and the financial report. The annual review describes Deutsche Bank’s corporate profile, including its FX business division and the financial report details earnings.
According to the 2013 annual review of Deutsche Bank, in the Foreign Exchange business, the first half of the year saw strong volumes and healthy client demand. The positive development also reflected Deutsche Bank’s improved offering and continued investment in the foreign exchange business, including the further development of app-based access to its products and services.
In the second half of the year however, revenues fell due to “ongoing margin compression,” meaning tightening spreads and lower market volatility bringing lower volumes. The review editors pointed out that with a market share of 15.2%, Deutsche Bank took first place in Euromoney’s foreign exchange market survey for the ninth year in a row, despite the challenging environment. Such a big market share makes Deutsche Bank’s results reflective of the whole FX primary bank dealer segment.
In the financial report section of the annual report released today, we can see that Deutsche Bank’s net gains on financial assets/liabilities at fair value through profit or loss decreased by € 1.8 billion to € 3.8 billion for the full year 2013.
The main driver for this development was a decrease of € 2.0 billion in Sales & Trading (debt and other products), which was primarily driven by lower client activity coupled with a challenging trading environment and market uncertainty impacting Rates and Commodities, as well as by lower revenues in Foreign Exchange due to lower volatility and margin compression.
Deutsche Bank’ Sales & Trading (debt and other products) net gains in 2012 were about $6.216 billion (€4,508 million) so the drop to about $3.506 billion (€2,544 million) in 2013 constitutes a 43.5% decrease year over year.