Deutsche Bank 1 - Historische Gesellschaft der Deutschen Bank e.V.

second half of the year, when uncertainty and stagna-
tion prevailed on the Euromarket.
There was also an increase in the volume of credit for
financing consignments to the Gerrnan Democratic Re-
public extended by the Gesellschaft zur Finanzierung
von Industrieanlagen rnbH, Frankfurt (Main), an asso-
ciate company of AKA.
Besides providing finance for German exports, one of
the main elements of our foreign business still remains
the systematic servicing of and the supply of credit to
first-rate international companies. In so far as this in-
volved loans with interest adjustment clauses written in
and without rnatctiirig refinancing matiirities - roll-over
credits - we adhered to the ceiling on our overall volume
because of the refinancing risks prevailing in this area.
As regards country risks, account had to be taken of the
conseqilences of the rise in oil prices. We have also Set
increasingly strict criteria where terms are concerried; in
particular we did not entcr into any more cornmitments
with maturities of over seven years, even in exceptional
cases, as we did not believe that the refinancing basis
perrnittcd this. We were able to meet our customers' fi-
riariciriy requirements in every case where these com-
plied with our criteria through our subsidiary, the Com-
pagriie Financiere de la Deutsche Bank AG (CFDB).
Growing earnings on foreign exchange dealings
Our cautious business policy in foreign exchange
dealings also proved its worth in 1974. Against a back-
ground of flexible exchange rates there were again
strong fluctuations in parities and a large measure of un-
certainty in 1974. We were able to expand turnover in
this sector of business by 11.7% and achieve a satisfac-
tory profit. Customers' requirements for forward ex-
change Cover were as high as ever. The advice of our
foreign exchange dealers was in ever increasing de-
mand.
The introduction of Principle la necessitated by the
Herstatt case and the ceiling imposed therein on foreign
exchange positions leaves us still sufficient room for
manoeuvre in our foreign exchange dealings but it does
involve an exceedingly large amount of work (due to sta-
tistical returns).
There were extrernely sharp price fluctuations on the
gold rnarket in the Course of the year. An exceptional
jump in prices occurred as a result of the exaggerated
expectations in connection with the lifting of the ban on
private ownership of gold in the USA.
The bank was able to maintain its leading role on the
German bullion and gold coin market. Although demand
from the gold-processing industry declined, there was at
the Same time growing interest for gold among private
investors. In the coin market we were able to double the
high sales result of the previous year. The number of
gold certificates issued by us more than trebled in 1974.
We held back from the highly speculative silver market.
With profits rising, the turnover in foreign notes and coin
remained roughly at the Same level as last year.
Successful performance of associated banks
In the year under review we were able to further ex-
pand our network of overseas bases. At theend of 1974
Deutsche Bank had a total of 67 representative offices,
participations and subsidiaries in 46 countries.
The capital of the lranian investment bank (Iran Over-
seas Investment Bank Ltd.), which has its headquarters
in London, has now been fully paid up. The bank's
business, with its emphasis on Euro-financing, devel-
oped well.
The multinational bank (International Mexican Bank
Ltd.), which it was decided last year to set up in London
on the initiative of Banco Nacional de Mexico, has now
been established. The institution started to earn a profit
already in the first nine months of operation. Roughly
70% of the business volume is transacted with Mexico
and other countries in South America.
The Banco Bradesco de lnvestimento S.A. in Brazil, in
which we and other EBlC Partner banks have a total in-
terest of 10%, achieved substantial growth in its lending
business in 1974. The parent bank. Banco Brasileiro de
Descontos S.A., can look back over an excellent busi-
ness year, in which deposits expanded strongly.
Having due regard to the growing economic impor-
tance of the Pacific area and the position of the Philip-
pines in this Part of the world, we acquired a participa-
tion in the AEA Development Corporation, Manila. This
investment bank, which was Set up two years ago by ten
Philippine banks, has enlarged the circle of its share-
holders by including three American banks, one Japa-
nese bank and Deutsche Bank. The bank extends short