Cryan, however, is unlikely to present “big bang” reforms on October 29, when the bank reports results and plans to provide more details of its so-called Strategy 2020.
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Cutting the value of intangible assets may not have much of an impact on an important regulatory capital measurement, something that Deutsche noted in its news release. The news that the Swiss lender that it was seeking additional capital reflects more than its continuing difficulty to keep up with reforms that increased the amount of cash global banks needed to keep to stay solvent in a downturn.
Litigation provisions of approximately Euro 1.2 billion, the majority of which are not expected to be tax deductible.
Those issues, coupled with factors including uncertainty over China’s growth, US interest rates and the slide in global commodities prices, have combined to depress profits for European banks.
It said: “As part of the planning for the implementation of Strategy 2020, the board will recommend a reduction or possible elimination of the dividend for 2015”. The company now has an average rating of “Hold” and a consensus price target of $30.15.
Analysts and investors welcomed the cleanup, and Deutsche shares rose 1% after falling 3% earlier.
Deutsche Bank chief executive, John Cryan accepted in a note to the bank’s staff: “The news is not good, and I expect a number of you will be very disappointed by it”.
In addition to historic fundamentals, investors often turn to Wall Street analysts to help determine the direction of a stock.
The company shares have dropped -15.47% from its 1 Year high price.
In London, shares in Barclays, HSBC and Royal Bank of Scotland were all lower with investors concerned over the value of the assets the banks hold.
Deutsche Bank says it will post a massive loss in the third quarter largely as a result of writedowns at its investment banking unit. Deutsche Bank AG is active domestically and in various countries, through the network of numerous branches. Specifically, the bank noted Bankers Trust, which it bought in 1999, and Deutsche Postbank that it acquired in 2010.
With Deutsche Bank and others, Credit Suisse is losing business to American competitors – in the year ending in June, the firm’s investment banking revenue fell $538 million.
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Deutsche Bank bought into Beijing-based Huaxia Bank, one of the smallest listed national lenders, in 2005 and its stake is now worth about $3.5 billion. To that point, his Wednesday memo said that compensation for 2015 will take a hit because “our shareholders will rightly expect employees to share something of the burden”. Final decisions on bonuses havent been made yet, he said.
