发帖
雷达卡
Deleveraging poses significant risk to profitability...
The twin engines of growth in leverage and rising earnings yield drove a doubling of
sector RoE over 2002-07 with capital market banks, notably Deutsche Bank, the key
beneficiaries. Significant markdowns and pro-cyclical asset growth create a need to
deleverage. At 58x (or 41x under US GAAP), Deutsche Bank tops industry leverage
ratios (34x, or 27x under US GAAP) and may have to follow the deleveraging
example of a number of its peers.
... as do 'second-round' effects
We believe the 'second-round' slowdown in capital markets and wealth management
is here and now. Customer activity should decelerate, especially given hedge fund
deleveraging; with lower volatility, the rates and currency business may not be
immune with the first evidence seen in April. Thus, earnings yields will likely step
back to 2003-04 levels, driven by both a revenue slowdown (to 2004-05 levels) and
pressure on pre-tax margins. Capital market banks are more exposed to such risks
than their diversified French peers.
Not out of the woods on 'first-round' markdowns
Although there have been some signs of price stabilisation and improving liquidity, we
believe there is significant basis risk given that cash (long) and index (hedge) prices
are not necessarily moving in tandem. SocGen, Credit Suisse and Deutsche Bank are
most exposed. Moreover, monoline risks could come back to the fore.
Sell Deutsche Bank; Buy BNP Paribas
We believe the market has given Deutsche Bank too much credit for avoiding the
worst of the 'first-round' markdowns. With significant earnings downgrade risk
(2009F EPS of
京公网安备 11010802022788号
