Deutsche Bank and Volkswagen: marked by the crisis

Deutsche Bank and Volkswagen: marked by the crisis


The fact that two of the leading German companies name new managers at virtually the same time can be a coincidence. The reasons in both cases lie in the crises of the past and the challenges of the future.

At first glance, Deutsche Bank and Volkswagen have almost nothing to do with each other. But if you look more closely, parallels are revealed. Both companies went through serious crises (in the case of Deutsche Bank the situation continues). And in both companies, the crisis was caused at home.

The diesel case has put Volkswagen in trouble. Matthias Müller took over his job three years ago more than anything out of a sense of duty because his predecessor, Martin Winterkorn, had no defense after the diesel scandal. The consequences were removed from vehicles and millions in fines, especially in the United States.

The Deutsche Bank had a similar experience. In the search for profits, in the last decade systematically left scruples aside, especially in investment banking: manipulated curves of interest are currently the subject of a judicial process in London. There must now answer a former employee of Deutsche Bank that at some point obtained record bonuses for their work. But also the employees who work for commissions deceived naive investors. Until the house of cards finally collapsed. The result: billions in fines and still many pending litigation.

The sanctions for this little glorious past affected both corporations at a time when money would really be necessary to prepare for the future. Digitization is progressing irrepressibly. The bank must prepare for that and, for example, modify its computer systems. Financial technologies are disputing the business to traditional banks. Blockchain technology will probably make intermediaries like banks superfluous, to make transfers.

The fraud of the exhaust pipes and the tests with monkeys

For its part, the electromobility is probably the main field in which Volkswagen has to position itself to remain competitive. The multi-million dollar fines of the diesel scandal have undoubtedly reduced their potential. And the sword of Damocles continues to hover over the company, because more and more negative news comes as a result of the scandal. Recently, it came to light that car companies like Volkswagen had commissioned experiments with monkeys to test the impact of their emissions. The judicial process is still pending in Germany.

The dear money

Finally, the main difference between the two companies is their commercial balance. While German bankers had to report a loss of 751 million euros last year, profits exceeded Volkswagen, despite the diesel. With Matthias Müller, the group has recently moved from one earnings record to another. With an operating profit of almost 14 billion euros, Volkswagen has obtained the best result in its history. Deutsche Bank is far from that and has had horrendous losses in the last three years.

The starting point is uneven: Christian Sewing, who assumed the leadership of the Deutsche Bank just a few days ago, has to make the company profitable again. The successor of Matthias Müller, probably the former brand manager of Volkswagen Herbert Diess, can structure the coming adjustments against the backdrop of record profits.

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