Yes, Deutsche Bank urgently needs more returns. That’s no secret. And when the investment bankers hardly get anything cooked at all, and when the private client sector in Germany simply generates too low returns… then take a look elsewhere?
There is still foreign exchange trading, where Deutsche Bank continues to play a leading global role. Worldwide Deutsche Bank is the largest foreign exchange processor for euro payments with a market share of 5%. Gigantic. Apparently we have seen the possibility to get even more profit out of it. Because according to information of finanz-szene.de the Deutsche Bank will widen the spreads (span between buying and selling rate) strongly with foreign exchange transactions for private and business customers starting from 1st of November.
In the Swiss franc this should result in an increase of up to 178%. On average, forex spreads are expected to rise by 30% on 40 affected currency pairs. However, the increases are greater for the currencies actively used by business customers for large transaction volumes. It is expected to be 122% for the pound, 72% for the US dollar, 175% for the yen and 178% for the Swiss franc, as already mentioned. So cheers, we would say?
Will one or the other corporate client turn away from Deutsche Bank? It confirms these fee increases, but points to the following circumstance in an interview with finanz-szene.de. Prices were “only adjusted to market conditions”, as they had previously been kept stable for a long time. In addition, securities and corporate customers “usually negotiate individual conditions”. That may be, so we would like to comment it.
And it may also be that the normal private customer pays little or no attention to the spread widening, because the few cents or euros do not hurt him/her. But the one or other corporate customer where the bank is not willing to negotiate – will he be looking for another bank because the cheaper spreads at DB are now history? Because the bank says it itself… they adapt to market conditions, i.e. to the level of their competitors.