Corporate Banking: Bank Trust and the Deutsche Bank - Term Paper Example

BANK TRUST AND THE DEUTSCHE BANK (Students name) (Institution) (Course number) (Date) Executive summary Deutsche bank is a legal entity that acts as a trustee on behalf of the business organizations and the individuals which is based in Frankfurt Germany having many branches all over the Europe, America, Asia-pacific and many other parts of the world. They are offering the financial products and services for the corporate and the institutional clients based on the administrative management and the eventual transfer of assets to a beneficial party. Due to their transparency and accountability in their dealings they have been able to increase their market share controlling the 21% of the industry of securities. Though banking and the financial sector experiencing some unethical issues in their dealings, the Deutsche bank has been able to utilize any opportunity within the market including the asset and wealth management, advancement in technologies, corporate governance and capital security management, consolidations and the amalgamations and the workforce training and customer relation, coming up with new innovations on the global banking and the transactions enabling customers to transact globally depending on where you are. Deutsche bank has been able to maintain the market share through being trustee of many business organizations due to its potential to offer the services online with the provisions of the attracted offers to the customers gaining the faith of the clients and restoring the confidence on the part of the clients making the bank to enjoy high profits and enjoy the economies of scale on operations carried. Due to the large dealings it has been in position to adopt government regulations sometimes offering capital to governments in exchange of the government bonds which also enables them to be a government agent and earning some reasonable interest. Introduction Bank is a financial institution where transactions of money takes place like the lending of the money to borrowers, acceptance of the deposits from clients and the sales of securities to various customers who are interested in the ownership. Bank trust is the legal entity that acts as a fiduciary agent of trustee on behalf of a person or a business organization for the purpose of administrative management and the eventual transfer of the assets to the benefiting party, (Yoshino, 2013,pg74). Mostly they act as the best agents to keep confidential information about their clients in respect to their accounts, assets and the financial investments employed within the financial organizations. Deutsche is a German global banking and the financial services company with the headquarters based in the Frankfurt with more than 100000 employees in over 70 countries including Europe, America, Asia-Pacific and the emerging markets globally. Because in any financial institution, they deal with the stock and foreign exchange dealings, the Deutsche bank is able to control 21% of the global foreign exchange dealings in the world thus making the bank the most trusted bank in the world. The bank trust may be enhanced through the confidence and the trustworthiness which the clients of the bank will have towards its customers. The Deutsche core business includes the investment banking particularly in equity and the leverage assets and the retained earnings invested back from the banks operations. Services are also offered with the bank such as sales, trading and the research in mergers and the acquisitions form of the business combinations, risk management products in wealth management, corporate finance, fund management and the retail banking and transaction banking which includes withdrawing and the depositing of the cash and cash equivalents in the bank. Discussion Corporate banking Corporate banking is related with the corporate governance which is a system by which an organization is directed or controlled. Corporate banking is concerned with the ways in which top management executes their responsibilities and authority and how they account to those responsibilities that have been entrusted to them. Through corporate banking the bank is able to enhance the trust of the clients due to the transparency and the accountability needed of them from the stakeholders of the bank, (Zinkin, 2014, pp 23), this has enabled the Deutsche bank to expand in terms of the global market control due to various strategies and procedures implemented and executed by the management. Being a trustee of many people, the governance of the Deutsche bank was able to grow multi-nationally which led to the economic liberalization of the firm. Because many customers have been losing trust with their banks, Deutsche bank has formulated procedures of dealing with the situations of the corporate failures which were making the customers to lose the trust with banks in most parts of the world, giving them an opportunity to take an advantage of those failures to increase the trust of the customers towards them. Most of the banks were losing this trust due to conflicting interest between the directors of those banks thus leading to the corporate failures of the banks. Company capital securities Capital trust securities are type of investment sold to investors by a specifically created trust established by financial institution. The securities of the Deutsche bank are payable when and as declared by the board of directors. The stakeholders other than directors does not have any voting right on how the capital securities should be paid or proposed for the payments, once the payments have been done on the banks securities it's upon the board to decide if there will be another payment and now the assessment of them becomes difficult thus increasing the confidence of the holders of the securities with the bank. The capital securities are redeemable at the option of the Deutsche bank in whole but not in parts and at the redemption date while thereafter on the payment date. The full amount of the redemption must be paid in full and when the notice is given by the company directors thus enhancing transparency and the accountability discouraging the insider trading who leaks on information about the securities trading. The laid down procedures of the redemption of these securities are able to make the bank’s reputations to increase while spreading their trade name as the best trustee in terms of securities investments that are provided in the banking sector. Customer information and workforce retaining The target person in banking is the customer or client who is depositing and borrowing money from them, buying and selling the securities of the company and who is able to invest in company through being a foreign exchange trader with the bank. The trust of the banks with their clients arises by how they are able to keep the information about the client, (Reuters, 2013, pg15) which is more of being a trustee of that person being that they keep those documents relating a particular person. To restore confidence and the loyalty of a client then bank should implement different strategies of storing the data of the clients and not disclosing information they have. Deutsche bank has tried to train the workforce of the emerging issues of the banking sector this facilitates the employees loyalty to their employer and encourages long time period of employees with the company such that they can’t move from their current employer. When the training and the retaining of the work force is not done then the possibility of the company losing information to the public is high because they go as they spread the negative part of the previous task they were doing and this makes the public to lose trust with the subject matter of discussion. Deutsche bank have tried that to close the skill gap rather than workforce turnover which has greater impact of losing several information about your client, through this they have been able to retain the faith from their clients and restore the confidence of them with the bank thus increasing the stability of the bank economically in the international market. Mergers, Consolidations, and the Acquisitions The Deutsche bank may not consolidate, amalgamate, merge or get acquired, transfer or lease its properties and assets substantially as an entirety o, any corporations or other body but this can be done with the consent of the company’s holders of the securities, consolidate, amalgamate or merge with a limited partnership, limited company or a trustee company under the laws and regulations of the land thus Deutsche bank uses the rule based approach on the issue of business combination. The approach helps the Deutsche bank in enhancing and retaining the clients trust in the sector of banking because with the rule,( Gehrig, 2013, pg 99) you either do is as specified by the law and face the penalty of not doing what was expected of you. In the process of the amalgamations, the Deutsche bank shall have the company securities successor who will be major shareholders of equity shares and the preference shares while now the clients regain their trust in that the successor can’t interfere with capital securities ranking and profitability. The successor company can join as a merger company but not as an associate of the bank and such amalgamation and mergers does not interfere with the current rating of the capital securities ranks and their holding and the voting rights within the bank. For the trust of the bank to grow stronger the successor of the capital security should be identical and also should not have the negative impact on the capital securities holder’s limited liability within the company. Advancement in Technology With the advancement in technology the banking trust have been improvised by having the better systems in place which enables the clients to interact with banks directly without appearing on board of the bank, (Hart, 2011, pg 69), the Deutsche bank has made it possible for the clients who hold securities in the bank to be able to track their assets which are held with the bank while they are away from the bank itself and this has facilitated the transparency of the Deutsche banks to his securities holders thus gaining trust and also helping the company to gain the larger market share for being the most trusted bank within the banking industry to trade within terms highlighted for the securities management. The Deutsche bank has been able to innovate many new ways of doing things like the procedures of the redemption of the securities and the amalgamations rules to follow, (Parker, 2011, pg 32). Due to this laid rules of the bank, it has been able to control the larger market share of the securities and this have been achieved due to the ability of the bank to innovate and invent new methods of performing the various tasks concerning the securities management and investment. The mobile banking and updates within the handsets have made it easier to transact with the bank making the efficiency in services provided by them. Market share is that portion which an organization is able to control and manage in a specific industry that is for Deutsche bank to enjoy the profitability ratios of the industry,( Harper, 2014, pg99), it must have the larger market share which is achieved through the customer loyalty and the trust towards the products and the services offered to them from customer care to public relations to how their investments are being handled and this is what we term as the customer’s trust which is a major determinant of the market share in terms of the economic growth and the stability of the company. The Deutsche bank has been able to grow internationally through Europe, America and Asia pacific because of the trust that is held by many investors who are willing to invest and pump more money in terms of securities into the bank which they achieve by promising the clients on the safety of their assets and investments with the bank. Assets and wealth management The asset management is the management of the client’s investments by the financial services usually the investments banks where the company will invest on behalf of its clients and give them access to the wide range of products and services that would not be available to average investors. Any client can select a bank as his/her trustee in terms of the wealth management as a means of achieving the good returns and protecting them from uncertainties that may occur to the wealth that have been invested,  ( Leake,2011, pg 19). Any person is interested on investing his wealth to a place where he is promised the good returns and information about his investment is not disclosed to the public interest. The Deutsche bank has proved this achievement on the wealth management and the asset management making so many people to trust them with all sorts of security details. Providing information to changes that occurs on the returns on investment to the clients and giving the statements relating to the wealth and assets management. For any bank to achieve customers trust, the investors of the bank must provide information about the wealth management statements of the clients and the plans to increase the market share of the bank in the international market. Deutsche bank has been providing the vast resources in terms of their wealth management which is serving the best interest of high net-worth and the ultra net worth individuals, families and selected institutions for more than a century thus making grater profits and returns for clients who invested there. As they reach wide globally in terms of the wealth and asset management, they also grow deep in the sense that they come up with the various ways and innovations for doing the jobs which targets the client’s growth in the investment formality. Through this, many investors are persuaded to invest in Deutsche bank thus helping the bank to reach in any corner of the world in terms of the investments taken with them. Insider trading and program trading Insider trading is an ethical issue with the financial services where there is a person in principle position who uses the confidential information which comes in his position for the personal advantage; it can be legal or illegal depending on when the insider makes the trade. Insider program is a computerised trading used by the institutional investors which are used in the large volume trading of orders from the investors; they are usually executed if the index processes sink to certain levels. Deutsche bank have tried to deal with the illegal insider trading by making the investors to monitor the insider traders and the reports they make to see how they are legally trading with their stocks thus retaining the client’s trust on the ethical issue and giving the sense of responsibility to the stock holders to counter check on how their stocks are being traded. The security exchange regulators still requires the insiders to report all the transactions so as to achieve transparency on the transactions done by the bank relating to the stock exchange,( Kahn, 2011, pg112).  All these activities on the insider trading are aimed at achieving the financial trust of the organization from its clients and the securities holders. When the stocks are regulated then the company is able to mobilise savings and this is done when the depositors of the money withdraw all their savings and invests them in securities which promotes the business activities in the sector when the investment is directed to due to the sense that whenever the Deutsche bank wanted to increase the additional capital, the bank can release those securities in the market since the company a enjoy a larger market share (Hurley, 2014, pg 22). Investors will be willing to trade in those securities because reliance is based on returns on investments will be motivating thus enhancement of the growth to both the Deutsche bank and the potential investors. Because every investor’s dream is to maximise on profitability, the Deutsche bank has been able to achieve this by providing wealth redistributions when the dividends and the capital gains are being distributed back to investors depending on the amount of back investments. Through the corporate governance, the company is able to propose some capital gains to investors motivating them to pump more money. This come with the promising nature of the bank with wealth which has prove to be a major obstacle in the current banking and the financial sector. The contemporary issue is leading some of the financial institutions to close down the operations due to dishonesty and lack of the integrity on the professional employed ( Richardson , 2013, pg 47)  Conclusions Deutsche bank core business is investment banking which represents equity, leverage assets and the retained profits with services offered being sales, trading and research on mergers and the acquisitions something that has made the bank to increase the market share with major operations in America and Europe making it able to retain their profitability and accomplish the global competing edge in financial industry. Bank trust is all about honesty and transparency in the financial dealings including professional standards and the competence on professionals who are employed in within the banking sector. Restrictions on dealings and the disclosure of the financial statements are all the duties of financial institutions something that have increased and restored the confidence and faith of the clients and the provisions of the attractive offers they are offering creating a competitive advantage on other financial institutions dealing with the capital securities and other forms of the investments. Bibliography GEHRIG, T. (2013). Capital, trust and competitiveness in the banking sector. London (77 Bastwick Street, London EC1V 3PZ) : Centre for Economic Policy Research. HARPER, R. (2014). Trust, computing, and society. New York : Cambridge University Press. HART, J. P. (2011). State bank & trust co. Gale Ecco, U S Supreme C. HURLEY, R., ESTELAMI, H., & ERIKSSON, K. (2014). Building Trust in Financial Services. Bradford, Emerald Group Publishing Limited.  KAHN, I. (2011). Mercantile-commerce bank & trust co. Gale Ecco, U S Supreme C.  LEAKE, J. J. (2011). State-planters' bank & trust co. [S.l.], Gale Ecco, U S Supreme C. PARKER, D. C. (2011). Closing a failed bank resolution practices and procedures. [Washington, D.C.] : International Monetary Fund. REUTER, M., WIJKSTRÖM, F., & UGGLA, B. K. (2013). Trust and organizations: confidence across borders. New York, NY : Palgrave Macmillan. RICHARDSON, B. J. (2013). Fiduciary law and responsible investing: in nature's trust. London, Routledge. YOSHINO, N., & KAJI, S. (2013). Hometown investment trust funds a stable way to supply risk capital. Tokyo, Springer. ZINKIN, J. (2014). Rebuilding trust in banks: the role of leadership and governance. Singapore : Wiley. MORRIS, N., & VINES, D. (2014). Capital failure: rebuilding trust in financial services. Oxford, United Kingdom : Oxford University Press. 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