![]() Last year, Deutsche Bank raised 2.96 billion euros by selling 90 million shares. “On the one hand, the last capital increase was very well received, but on the other, Jain seems to have categorically excluded it.” “But it’s always a question of the lesser evil,” said Assenagon fund manager Michel Huenseler. The paper cited sources at the bank as saying that no decision had been made but that Deutsche Bank’s co-chief executives, Juergen Fitschen and Anshu Jain, were thinking of a “Plan B” to give an extra fillip to its efforts to close the gap with international rivals in terms of capital strength. Worries about the capital cushion and dimming revenue prospects have led to repeated speculation that Deutsche Bank would need to raise equity capital before long.įinancial daily Handelsblatt on Friday reported the lender was considering a capital increase of up to 5 billion euros this year to cope with new regulations and European “stress tests” of the industry, sending its shares down more than 2 percent. “A capital ratio of around 9 percent is simply too low for an investment bank like Deutsche Bank,” the investor said. “Deutsche Bank is rather weakly capitalized, and there is a weak trend in fixed income and in investment banking, so that you can’t get much from retained earnings,” said a German shareholder, whose company policy does not authorize him to speak publicly.ĭeutsche Bank managed to boost its core tier one ratio - a closely watched measure of balance sheet strength - to 9.7 percent at the end of 2013, but a raft of new banking rules are likely to bring the ratio closer to 9 percent by next year and the lender still faces litigation costs around the world as fallout from the financial crisis, the investor said. ![]() ĭeclines in the business - traditionally the main money spinner at Deutsche Bank - are seen hampering the lender’s bid to build up its capital cushion to meet tough new banking rules introduced in the wake of the financial crisis. Revenue declines in the fixed income, currencies and commodities (FICC) business have already dogged investment banking results at peers such Barclay's BARC.L, JPMorgan JPM.N and Citigroup C.N. REUTERS/Brendan McDermidĭeutsche Bank is expected to post quarterly pretax profit of 1.4 billion euros ($1.9 billion) on Tuesday, around 1 billion less than a year earlier, the average forecast in a Reuters poll of banks and brokerages showed on Friday. A Deutsche Bank sign is seen on the floor of the New York Stock Exchange January 15, 2014.
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