Euromoney released the results of its benchmark Forex Survey for 2012 recently and Deutsche Bank (NYSE:DB) was ranked first by the survey for the eighth consecutive year – reinforcing the fact that the German bank has an iron grip on the global foreign exchange market. [1] Citigroup (NYSE:C) came in second, followed by Barclays (NYSE:BCS) and UBS (NYSE:UBS).
The survey results are a fitting tribute to the bank’s outgoing CEO Josef Ackermann who was at the helm for 10 years and is credited with taking the bank global and making it Europe’s largest bank. Ackermann’s role has now been entrusted to the duo of Anshu Jain and Juergen Fitschen.
We maintain a $49 price estimate for Deutsche Bank’s stock, which is about 36% above the current market price. The negative market sentiment towards bank stocks, and European banks in particular, are largely responsible for the significantly depressed share price.
See our full analysis for Deutsche Bank
The global foreign exchange market sees transactions worth around $4 trillion each day, and continues to grow at a rapid pace. This makes it an indispensable part of the trading business of any investment bank. Earlier this year, we detailed how the world’s biggest banks are in the race to come up with better foreign exchange technologies to take on each other in a market which offers paper-thin margins (see Banks Upgrade Forex Trading Systems in Pursuit of Growth).
| Bank | 2012 | 2011 | ||
| Rank | Share (%) | Rank | Share (%) | |
| Deutsche Bank | 1 | 14.57 | 1 | 15.65 |
| Citigroup | 2 | 12.26 | 4 | 8.86 |
| Barclays | 3 | 10.95 | 2 | 10.76 |
| UBS | 4 | 10.48 | 3 | 10.60 |
| HSBC | 5 | 6.72 | 6 | 6.27 |
| JPMorgan | 6 | 6.60 | 5 | 6.44 |
| RBS | 7 | 5.86 | 7 | 6.20 |
| Credit Suisse | 8 | 4.68 | 8 | 4.80 |
| Morgan Stanley | 9 | 3.52 | 10 | 3.65 |
| Goldman Sachs | 10 | 3.12 | 9 | 4.13 |
Euromoney FX Survey 2012 Results Summary [2]
The table above summarizes the results of the survey and shows the standings for each of the 10 largest banks in the global foreign exchange space. Deutsche Bank sits tight at the top with a near-15% share. Citigroup emerged as the biggest gainer on the list, jumping 2 places and showing a good 3.4% increase in market share.
Banks normally include their forex trading revenues as a part of their FICC (fixed-income, currency and commodities) trading business. The chart below shows Deutsche Bank’s historical trading yields as well as estimates for yields in the years to come. You can understand how changes to the yield figure affects Deutsche Bank’s value by modifying this chart.
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Notes:- Euromoney’s 2012 Forex Survey, May 8 2012 [↩]
- Deutsche Bank Fends Off Citigroup as Top Currency Trader, Bloomberg Businessweek, May 9 2012 [↩]
