Deutsche Bank, BlockchainK2, Commerzbank – Digitization is inevitable in asset management

Deutsche Bank – Driving digitalization

Deutsche Bank offers first-class wealth management services individually tailored to its clients' financial goals and risk appetites. In 2021, it was named the best private bank in Germany and offers its customers interesting investment opportunities despite increased inflation. The Company has appointed Raffael Gasser as the new Head of Wealth Management. He comes from UBS and has experience in dealing with wealthy customers. This step is part of the realignment of Deutsche Bank's private client business, which also includes branch closures and investments in digital offerings.

The group is investing in new ATMs and a modernized app. In order to improve the advice given to wealthy clients, new private banking centers are being set up that are equipped with modern facilities. The bank sees the future in digital banking but still wants to offer personal advice. Deutsche Bank is thus following the industry trend, as more and more customers are using online banking and rarely visit a branch. Should personal contact ever be required, Deutsche Bank offers customers the choice between branches, video advice, and the traditional telephone option.

According to JPMorgan, Deutsche Bank could enter the fight for Commerzbank. JPMorgan analyst Kian Abouhossein has taken a closer look at both stocks and concludes that this could happen, as Commerzbank publicly rejects a takeover by Unicredit. Both German banks had already considered a merger in 2019 but abandoned the idea. Whether Deutsche Bank actively engages in the Commerzbank takeover depends on the German government's response and Deutsche Bank's profitability plans. The analyst sets a price target of EUR 20 per share. The stock is currently trading at EUR 15.12.

BlockchainK2 - Bridge between cryptocurrencies and traditional capital markets

BlockchainK2 is a dynamic company dedicated to investing in groundbreaking blockchain technologies. This holding company identifies and promotes promising blockchain projects that have the potential to revolutionize traditional business models. BlockchainK2 is not exclusively focused on the alternative investments sector but is looking for a wide range of applications to drive technological progress and thereby create long-term value for its shareholders.
RealBlocks, a subsidiary of Blockchain K2, aims to fundamentally change the alternative investments market. The Company has raised over USD 20 million to introduce a global digital platform model that digitizes and automates previously paper-based processes. This not only reduces costs and speeds up operations but also increases the liquidity of traditionally illiquid assets. RealBlocks offers a comprehensive solution for fund managers, advisors and investors, covering everything from investor onboarding to fund administration and real-time trade execution.

One of RealBlocks' outstanding features is its ability to enable automated subscription contracts and trading on an authorized marketplace. These features ensure that transactions in the secondary market run smoothly and securely. In this way, RealBlocks offers unprecedented transparency and efficiency in the alternative investments sector. These innovative solutions have positioned RealBlocks as a pioneer in an industry that has been characterized by slow and costly processes. The stock has a market capitalization of just CAD 4.5 million at a current share price of CAD 0.15. More than four times the development costs have been invested in the RealBlocks asset.

Commerzbank – Takeover rumors boost the share price

Commerzbank manages an impressive EUR 150 billion of assets as part of its wealth management services. These services are aimed primarily at wealthy private clients seeking customized financial solutions. An outstanding feature is the focus on sustainability, as all products are evaluated according to ESG criteria (environmental, social and governance). Nevertheless, there are also some points of criticism: the lack of transparency and insufficient individuality are often criticized, while the fee structure is not always considered appropriate. Digitization could ensure lower costs here.

However, the German government's plan to gradually sell its stake in Commerzbank, around 16 years after it entered the bank during the financial crisis, is currently the focus of attention. This plan initially led to price losses, but the share price recovered in the following days. Tension increased with UniCredit's announcement that it had acquired 9% of Commerzbank shares. Even though UniCredit CEO Orcel ruled out a full takeover, interest in Commerzbank remains. The German government is currently exploring the situation before further shares are sold, fueling various speculations about the bank's future.

The interest certainly stems from Commerzbank's good figures. In the first half of the year, a net profit of EUR 1.285 billion was achieved, which corresponds to an increase of 12% over the previous year. Net interest income rose by 2% to around EUR 8.1 billion. The return on equity improved by 0.8 percentage points to 8.9%, while the CET1 ratio is above 14%. With an operating profit of EUR 0.9 billion in the second quarter and a planned payout ratio of at least 70%, the bank is optimistic about the future. The share price has also risen following the takeover rumors and is currently trading at EUR 15.695.

Digitalization is essential in wealth management to achieve cost savings and increase efficiency. This is crucial not only for profitability but also for meeting the increasing expectations of customers. Deutsche Bank has improved in the area of digital transformation, which improves the customer experience while also helping to achieve financial goals. BlockchainK2 is modernizing asset management using blockchain technologies with its RealBlocks subsidiary. Digitalization could help Commerzbank to improve on points of criticism such as transparency, costs, and individual support. However, the takeover rumors are still in the spotlight.