Dissertation \ Project \ Report Proposal Form
Module Code and Title: RESEARCH METHODS AND SKILLS
Programme of Study: MSc International Accounting and Finance
Title of Dissertation \ Project \ Report:
Analysis of the Reasons for the Fall of Deutsche Bank’s Stock Price and Its Enlightenment to Bank of China.
Ethics Declaration:
Every Dissertation\Project\Report involving human participation, whether at undergraduate or postgraduate level, must have written approval from the KBS REAG Chair. Approval is obtained by carrying out an ethics review along with your supervisor. Please search ‘KBS Research Ethics’ in Moodle for further information. A signed electronic copy of this form must be submitted by the Supervisor (Principal Investigator) and approved by the REAG Chair before potential participants can be approached to take part in any research. Should the agreed proposal involve human participants it is essential that Ethical approval is received before you conduct your research?
Supervisor’s Name:
Student’s Signature:
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Analysis of the Reasons for the Fall of Deutsche Bank’s Stock Price and Its Enlightenment to Bank of China.
Introduction
Deutsche Bank is an important commercial bank in the Eurozone and one of the world’s systemically important banks. It has a relatively direct impact on the stability of the financial system within and outside the Eurozone. Established in 1870, Deutsche Bank has become a versatile banking group after 148 years of development. Its branch structure, subsidiaries and actual control companies are spread over more than 70 countries and regions. However, in recent years, due to the endless scandals and successive investigations and fines, Deutsche Bank’s share price has continued to fall. On July 6, 2016, Deutsche Bank’s share price on the German stock exchange fell 5.56%, reaching a record low. At the beginning of 2016, the cumulative decline was 60%. This paper will study the reasons for the decline of Deutsche Bank’s share price from internal and external reasons, and draw some inspiration from it for reference by Chinese commercial banks.
Research Rationale
Deutsche Bank is the largest universal bank in Germany and Europe. It is regarded as a model for the sound operation and sound supervision of the German financial industry. It has successfully resisted the impact of two major crises. However, in recent years, Deutsche Bank’s share price has fallen sharply, and negative news such as money laundering, fraud, and fines have continued (Delamaide, 2016). What makes Deutsche Bank develop to the present situation is a topic worth studying.
Research Objectives
The purpose of this paper is to analyze the decline of Deutsche Bank’s stock price from two main reasons: internal reasons and external reasons. For example, due to improper internal supervision, it caused the occurrence of money laundering in Russia (Strasburg, Ballhaus and Volz, 2019); the proportion of self-owned assets to total assets was low, and the problem of operating leverage was serious; the economic environment in Europe was not good, and it was affected by political factors such as Brexit. Analysis of these reasons can be useful for Chinese commercial banks.
Significance of Research study
Deutsche Bank has a history of 148 years of development and played an important role in the development of the German economy. Its problems in financial behavior and the resulting results have fully exposed its own operating loopholes and the current European financial regulatory blind spots, which have important reference significance for Bank of China financial risk prevention and deepening financial regulatory reform.
Background of Deutsche Bank
On March 10, 1870, the bank was founded in Berlin under the name “Deutsche Bank Co., Ltd.”. In 1876, Deutsche Bank acquired local banks such as Deutsche Bank and became the largest bank in Germany (Delamaide, 2016). In the 1930s, it experienced the financial crisis for the first time. In 1959, it started its business again and began to set up branches around the world. Later, after the impact of the global financial crisis, the bank withdrew from Mexico, Argentina and other markets in 2016. As of the end of March 2018, the bank had 2,407 branches in 70 countries or regions around the world, of which 1,555 were in Germany and 852 were outside the country; the total number of employees was 97,130, of which 46% were employees under 40 years of age, female employees accounted for 42%. Between 2011 and 2015, Deutsche Bank, due to its three branches in New York, Moscow and London, failed to find that the sanctioned Russian customers used the “mirror transaction” method to transfer 10 billion US dollars out of Russia, suspected of cross-border money laundering and other criminal activities. The US financial services bureau (DFS) and the UK Financial Market Conduct Authority (FCA) imposed a fine of $425 million and £163 million, respectively, shocking the international financial community.
Methodology
The financial ratio analysis will be used to compare the operating conditions of the bank money laundering scandal before and after the occurrence. The financial ratio is divided into four groups, including: profitability, liquidity ratio, efficiency ratio and investment ratio.
Data Collection
The data will be collected from the audited financial statements on the Deutsche Bank website for analysis in nearly five years.
Executive summary
From the perspective of Deutsche Bank’s own reasons, the bank’s leveraged management problem is serious; the business structure is not balanced; employees’ ability level and moral level are problematic (Strasburg, 2018). For external reasons, the bank’s reputation has been affected by its alleged money laundering in Russia and its failure to pass the 2016 Bank Stress Test published by the Federal Reserve on June 29. In addition, the poor political and economic environment in Europe has had a negative impact on the overall development of banks.
Structure of Business report
The business report will have the following structure.
Introduction.
This section has already shown at the beginning of this proposal.
Literature review
This part will examine the previous studies related to this kind of topic and these will include journal articles and news.
Methodology
With the use of the financial ratio analysis, my aim is to find out the reason for the stock price decline of Deutsche Bank. Especially the impact of the money laundering in Russia.
Discussion and analysis of findings
An analysis of the findings.
Recommendations
How can Chinese banks avoid or decline these kind of problems happen to them.
Conclusion
A summary of the whole report.
Appendix.
Data, tables and diagrams used in the report.
Bibliography
The list of resources used in the report.
Project schedule
14-Feb to 24-Feb: Decide research topic.
24-Feb to 10-Mar: Find relevant information to determine the direction of the paper.
11-Mar to 20-Mar: Writing and submit proposal.
01-Apr to 10-Apr: Adjust methodology and research.
Analyze data.
: Write up.
Bibliography
Delamaide, D. (2016). Deutsche Bank moment’ a study in risk management. USA Today, p.02b.
Strasburg, J. (2018). Deutsche Bank Defends Itself With Stock Near All-Time Low; Finance chief says lender isn’t aware of ‘wrongdoing on our part’ after surprise raid last week. Wall Street Journal (Online); New York, N.Y., Markets.
Strasburg, J., Ballhaus, R. and Volz, D. (2019). Investigators Expected to Probe Deutsche Efforts to Shed Loan to Russian Bank; German lender, seeking to slash its exposure to Russia in late 2016, scrambled to sell a $600 million loan. [online] Available at: http://library.kent.ac.uk/cgi-bin/resources.cgi?url=/docview/2175143119?accountid=7408 [Accessed 19 Mar. 2019].
