Deutsche Bank Competition
Now Viewing Deutsche Bank's competition in: Banks and Credit Unions (primary)
Call Preparation Questions
Customers, Marketing, Pricing, Competition
How many depositors does the bank serve? -
How large is the average commercial customer? - Size often determines what services the customer needs.
Does the bank have loan concentrations in a particular industry? - In rural areas, for example, banks may have many agricultural loans.
Have mergers or acquisitions of banks in the bank's market occurred recently? - The greater efficiency offered by computerized functions has driven a wave of merger activity in recent years.
Does a larger competitor operate in the local market? Is this competitor the price leader? - Smaller banks often price products in relation to those of the market leader.
What types of marketing does the bank use to attract deposits? -
How large a sales force does the bank have? With how much banking experience? - Experienced bankers often have more success with customers.
Competitive Landscape
Demand for banking services is closely tied to economic activity and the level of interest rates. The profitability of individual banks depends on marketing skills, efficient operations, and good risk management. Large economies of scale exist in some segments of the industry, which has encouraged industry consolidation. Smaller banks can compete successfully in segments where customer service or knowledge of the local market is more important. The industry is capital-intensive and highly automated: annual revenue per employee is close to $300,000.
Business Challenges
CRITICAL ISSUES
Concentration of Real Estate Loans - Banks earn substantial fees from real estate loan transactions, and hold large portfolios of real estate loans and securities. Less demand for real estate credit would cut the fee income of banks, while decreased real estate loan quality would cut profits.
Exposure to Interest Rate Changes - Because many banks make money mainly by lending funds at higher interest rates than they have to pay to acquire funds, their profits are sensitive to changes in interest rates. When the cost of funds rises, bankers may be unable to increase the interest rates on their outstanding loans by an equal amount. As interest rates rise, demand for loans typically falls. Some banks use elaborate hedging strategies to protect against rate changes.
Industries Where Deutsche Bank Competes
- Banking
- Money Center Banks(primary)
- Banking - Europe
- Financial Services
- Asset Management
- Investment Banking
