Deutsche Bank AG - Historische Gesellschaft der Deutschen Bank e.V.

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General Economic Situation Sustained growth of the world economy In 1989, the seventh year of the current upswing, the world economy continued to expand at a notable pace. GNP growth in the OECD countries was stronger than expected at approximately 3.5'16 though not as marked as in the previous year (+4.3%). The rise in the number of employed persons was maintained across a broad front. In the OECD region another roughly 6 million jobs were created in 1989; the unemployment rate declined from 7% to C. 6.5%. On average, prices climbed by just under 5% (1988: 3.8%). Inflationary risks stem mainly from wage cost pressure. Expanding world trade World trade expanded quickly in 1989; at 7 to8% in real terms the growth was not much lower than in the previous year. Here, the growing integration of Asia's young industrial nations into the world economy was a contributory factor. Thus, after strong growth in the three previous years (by an average of 20%). the foreign trade of Hong Kong, Singapore, South Korea and Taiwan together improved again by about 10% in real terms. The external economic imbalances of the main industrial regions - the U.S.A., Japan and Europe - continued to decrease in 1989. Federal Republic of Germany: strongest growth in the '80s The upturn in the Federal Republic of Germany, now underway since 1983, proceeded at an increased Pace in 1989.The4%growth in real GNP was the highest in ten years. The number of employed persons rose by 344,000 to a new post-war high of 27.65 million. Despite the arrival of 721,000 East Germans and other ethnic Germans in the Federal Republic of Germany, the number of unemployed declined by 204,000. The average annual inflation rate climbed to 2.8%. For the first time since 1974, the Federal budget (incl. social security) recorded a surplus (DM 5.6 bn.). Dynamic exports and capital spending Exports and capital spending were the key factors in the strong GNP growth of the Federal Republic of Germany in 1989. Exports grew by 10.8% in real terms; capital investment in machinery and equipment climbed by9.1%, and in buildings by5.2%. However, private consumption increased by only 1.6% in real terms, whilst public consumption even declined by 0.8%. Newcomers ease bottlenecks on the labour market The widespread shortage of suitable labour despite persistent high unemployment was alleviated in the Federal Republic in 1989 by the inflow of East Germans and other ethnic Germans. Out of an estimated 450,000 newcomers seeking employment, about 200,000 found jobs. The availability of this group of people to take on vacant positions which would otherwise not have been filled, or at least not as quickly, facilitated higher overall production in 1989. lncreasingly restrictive monetary policy Reacting to the strong economic dynamism and related fears of inflation, the Bundesbank further tightened its monetary policy. Key interest rates were increased in four Stages by a total of 2% percentage points to 6% (discount rate) and 8% (Lombard rate). There was a marked fall in the Pace of money supply growth over the year. With an expansion rate of 4.7% the monetary target of "approximately 5%" was attained. One of the effects of the tighter Bundesbank policy was the inversion of the interest rate structure on the money and capital markets. At year's end,
short-term interest rates were higher than long-term New approaches in debt strategy rates, which had not risen so steeplyiat the beginning of the year short-term rates had still been substantially lower. After declining in the previous year, the foreign commitments of the highly indebted developing countries increased again in 1989 (to C. $625 bn.).The payment difficulties of the countries concerned perlnterest rates rise aciain - worldwide In the other European indu~trial arid Japan, toot average interest for were for themost partappreciab'y higher than in the previous year In the U.S.A.. however. more moderate growth forecasts and the diminished risk of inflation led to a noticeable decline in short and long-term interest rates in The differente bemeen U'S. sisted. The prices for bank Claims on the secondary market continued to fall. The danger of default, up to complete irrecoverability. looks high. Without a substantial reduction of the debt burden many countries are unlikely to achieve satisfactory economic development The reorientation of the official debt strategy introduced by U.S. Treasury Secretary Brady in March 1989 takes this into account by focussing first arid foremost On the reduction of debts fo com- arid DM money market which at the beginning mercial banks through partial debt forgiveness, arid Of the year "Ood at almest four percentage iowering interest ratesfor countries wiiiing to reform. points, had completely disappeared by the end of the year; in the lang-termsegment it was well down. From strong dollar to strong D-Mark In 1989 the foreign exchange marketswere initially influenced by theverystrong dollar. From September onwards the D-Mark gained in value owing to changes in interest rates and business activity. As a result of the political upheavals in East Germany and East European countries the firming of the D-Mark gathered Pace towards the end of the year. The re- valuation of the D-Mark during 1989 was particularly marked against the yen (+20%) and sterling (+18%). The global (trade-weighted) external value of the D-Mark was also up slightly in real terms; however, thisdid not make upfor the considerable losses in the previous year. uss h. Japan bxol>cwi~(FCJ 1 USA 100-
Page 1 and 2: Deutsche Bank at a glance Deutsche
Page 3 and 4: Alfred Herrhausen Commitment was th
Page 5 and 6: Honorary President Hermann J. Abs,
Page 7: Board of Managing Directors Rolf-E.
Page 12 and 13: International bond markets: the vea
Page 14 and 15: Deutsche Bank - Your Partner Worldw
Page 16 and 17: Development of Deutsche Bank Group
Page 18 and 19: In 1989, Deutsche Bank AG received
Page 20 and 21: Deposits business: demand for highe
Page 22: We arranged three medium-term notes
Page 25 and 26: The steadily growing demands placed
Page 27: It is with deep regret that we repo
Page 30: End of 1%9 End of 198B Change DM m.
Page 33 and 34: Commission surplus on services busi
Page 35: Report of the Supervisory Board
Page 38 and 39: Deutsche Bank AG EI Annual Balance
Page 40 and 41: Balance Sheet as of December 31, 19
Page 42 and 43: Profit and Loss Account for the per
Page 45: Growth of Capital and Reserves .- .
Page 48 and 49: y up to an aggregate DM 500,000,000
Page 50 and 51: Honorary President Hermann J. Abs C
Page 52 and 53: Deutsche Bank AG EI Report of the G
Page 54 and 55: Consolidated companies The Consolid
Page 56 and 57: At BAI Factoring S.p.A., Milan, the
Page 58 and 59: and increased profits from foreign
Page 60 and 61:
to DM 133.0 m. A dividend of 18% wa
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and reserves again stand at DM 55 m
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Fefa Beteiligungsgesellschaft mbH,
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complies with the provisions of the
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Loans to corporate customers grew b
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Consolidated Profit and Loss Accoun
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On the basis of resolutions by the
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Assets Deutsche Bank Aktiengeseiisc
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Assets Consolidated Balance Sheet B
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for the period from January 1 to De
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Figures from the Consolidated Balan
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Shareholdings of Deutsche Bank AG p
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Dt:iiicct-ie Batik Gestion S A . Pa
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LI & L Holding(lc:st:llst:I-iafl rr
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. .- -. .- ...... ...... . K) dccl;
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Group Coordinators and Executive Vi
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Executive Vice Presidents and Senio
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(;i(::,:,(:ri I 1i:rk)orii (l.)iIlk
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Subsidiaries: Deutsche Bank Berlin
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Switzerlarid Dt:irische Bank (Suiss
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L)H Asi'i titiiiiicc (I-{I
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Contemporary Art at Deutsche Bank T
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Dear Shareholders, Deutsche Bank AG
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Ms. Sachau gives the following reas
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Mr. Eduard Bernhard, Kleinostheim,
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Dear Shareholders, With the notice
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The sharcs may also bc dcposited wi
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from: Annual ßcport for 1989 of De
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a new generation of teachers and go
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of environment quality become a pot
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The human race ma): as HansJonassa
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All this goes to show that there ha
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