Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

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Koss Making: Commerzbank (CBK.GY) losses of EUR 54 mn beat the Street's loss expectations of EUR 125 mn on better than expected revenues (up 7% YOY) which were driven by a 28% YOY improvement in net interest income -  despite the one-off events which too were higher than expectations. </li>
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Structurally Unsound: Commerzbank's 2020 earnings forecast, however, amount to a measely ROA of 13 bp. As such, Commerzbank remains very vulnerable to the next downturn with thinner capital and a cost income ratio in the mid-70s. Despite the poor reported fundamentals, Commerzbank shares have responded to the ECB's capital forbearance and anticipated cost cutting measures. </li>
</ul>



Koss Making: Commerzbank (CBK.GY) losses of EUR 54 mn beat the Street's loss expectations of EUR 125 mn on better than expected revenues (up 7% YOY) which were driven by a 28% YOY improvement in net interest income -  despite the one-off events which too were higher than expectations. 

Structurally Unsound: Commerzbank's 2020 earnings forecast, however, amount to a measely ROA of 13 bp. As such, Commerzbank remains very vulnerable to the next downturn with thinner capital and a cost income ratio in the mid-70s. Despite the poor reported fundamentals, Commerzbank shares have responded to the ECB's capital forbearance and anticipated cost cutting measures. 


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No Plan B After Merger Failure:German press reported that the European Central Bank (ECB) has criticized Commerzbank (CBK.GY) in December 2019 over its new business plan, which called for a very modest 2-4% return on tangible equity and a Plan B.</li>
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Challenging Set of Results: With looming German and European GDP downgrades, and mainland China looking at a prolonged slowdown - if not a massive financial crisis of their own, Commerzbank's shares are already trading at 25% P/TBV. Between the Deutsche Bank finds during pre-merger due diligence and a weaker global economy, Commerzbank weak results seemingly are being telegraphed. </li>
</ul>



No Plan B After Merger Failure:German press reported that the European Central Bank (ECB) has criticized Commerzbank (CBK.GY) in December 2019 over its new business plan, which called for a very modest 2-4% return on tangible equity and a Plan B.

Challenging Set of Results: With looming German and European GDP downgrades, and mainland China looking at a prolonged slowdown - if not a massive financial crisis of their own, Commerzbank's shares are already trading at 25% P/TBV. Between the Deutsche Bank finds during pre-merger due diligence and a weaker global economy, Commerzbank weak results seemingly are being telegraphed. 


Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Thematic (Sector/Industry)

The London Interbank Offer Rate (LIBOR), also called 'The World's Most Important Number', acts as a benchmark for over US$240 trillion of assets and with LIBOR scheduled to be replaced by the Secured Overnight Funding Rate (SOFR) by end 2021, the stakes have rarely been higher to ensure a smooth transition.In this Insight, we take a look at the history of LIBOR, what are LIBOR and SOFR and how they differ, why is the transition needed, the progress made in the transition and who will be affected by the transition.

The London Interbank Offer Rate (LIBOR), also called 'The World's Most Important Number', acts as a benchmark for over US$240 trillion of assets and with LIBOR scheduled to be replaced by the Secured Overnight Funding Rate (SOFR) by end 2021, the stakes have rarely been higher to ensure a smooth transition.In this Insight, we take a look at the history of LIBOR, what are LIBOR and SOFR and how they differ, why is the transition needed, the progress made in the transition and who will be affected by the transition.

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<li>
Weak Core Result: Deutsche Bank (DBK.GY) [Deutsche] reported pre-tax loss of EUR 1.29 bn and a clean pre-tax loss of EUR 34 mn  - versus clean consensus of a pre-tax loss EUR 3 mn. The corporate, investment and private banking divisions all under-performed whilst DWS outperformed on performance fees. While Deutsche beat top line revenues by 5% (particularly FICC) and asset management results, valuation and timing differences flattered top line growth. Loss provisioning also appeared weak.</li>
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Shares Looking Vulnerable Again: DWith shares up 20% YTD and trading at 35% 2019 TBV, and Germany vulnerable to more export downgrades in 2020H1 due to China in semi-lockdown, shares are again looking exceptionally vulnerable.  </li>
</ul>



Weak Core Result: Deutsche Bank (DBK.GY) [Deutsche] reported pre-tax loss of EUR 1.29 bn and a clean pre-tax loss of EUR 34 mn  - versus clean consensus of a pre-tax loss EUR 3 mn. The corporate, investment and private banking divisions all under-performed whilst DWS outperformed on performance fees. While Deutsche beat top line revenues by 5% (particularly FICC) and asset management results, valuation and timing differences flattered top line growth. Loss provisioning also appeared weak.

Shares Looking Vulnerable Again: DWith shares up 20% YTD and trading at 35% 2019 TBV, and Germany vulnerable to more export downgrades in 2020H1 due to China in semi-lockdown, shares are again looking exceptionally vulnerable.  


Deutsche Bank - Hello Darkness My Old Friend

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

We continue to see coronavirus concerns as helping correct the excess bullish sentiment across global equity markets in the short-term. Additionally, considering the dearth of breakdowns, we continue to believe this is a bull market until proven otherwise and a “buy the dip” strategy remains warranted. We recap importat technical levels across markets and highlight opportunities within the Services, Technology, Financial Services, and Staples Sectors.

We continue to see coronavirus concerns as helping correct the excess bullish sentiment across global equity markets in the short-term. Additionally, considering the dearth of breakdowns, we continue to believe this is a bull market until proven otherwise and a “buy the dip” strategy remains warranted. We recap importat technical levels across markets and highlight opportunities within the Services, Technology, Financial Services, and Staples Sectors.

Global Equity Strategy: Growth Over Value

United Kingdom

Deutsche Bank AG is a global financial service provider delivering commercial, investment, private, and retail banking. The Bank offers debt, foreign exchange, derivatives, commodities, money markets, repo and securitization, cash equities, research, equity prime services, loans, convertibles, advice on M&A and IPO's, trade finance, retail banking, asset management, and corporate investments.

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Deutsche Bank AG (DBK1 LI)

Commerzbank - Schnitzeled

Koss Making: Commerzbank (CBK.GY) losses of EUR 54 mn beat the Street's loss expectations of EUR 125 mn on better than expected revenues (up 7%...

Thomas J. Monaco

Commerzbank - Expect a Messy Quarter

No Plan B After Merger Failure:German press reported that the European Central Bank (ECB) has criticized Commerzbank (CBK.GY) in December 2019...

Thomas J. Monaco

The End of LIBOR Is Not SOFR Away

The London Interbank Offer Rate (LIBOR), also called 'The World's Most Important Number', acts as a benchmark for over US$240 trillion of assets...

Brian Freitas

Deutsche Bank - Hello Darkness My Old Friend

Weak Core Result: Deutsche Bank (DBK.GY) [Deutsche] reported pre-tax loss of EUR 1.29 bn and a clean pre-tax loss of EUR 34 mn - versus clean...

Thomas J. Monaco

Global Equity Strategy: Growth Over Value

We continue to see coronavirus concerns as helping correct the excess bullish sentiment across global equity markets in the short-term....

Vermilion Research

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