The CEO of Deutsche Bank reassured employees and markets that the company’s finances were “rock-solid” as Europe’s banks took another a beating in the stock market Tuesday.
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He said staff at the bank could tell customers concerned about investing with the bank that “Deutsche Bank remains absolutely rock-solid, given our strong capital and risk position”.
Deutsche Bank’s shares have fallen around 40 percent since the start of the year, leading a slump across the European banking sector – with a relief rally on Tuesday after the bank said it had reserves to pay coupons on its riskiest type of debt extinguished and erased by the afternoon.
Deutsche Bank has had negative press for years amid a number of litigation and scandals.
Analysts await Deutsche Bank AG (USA) (NYSE:DB) to reports earnings on May, 4.
A sentiment echoed by Ed Yardeni, chief investment strategist at Yardeni Research, who told CNN today that “Major central banks have run out of ammo”.
“The price of Deutsche shares appear to be pricing in significant recapitalization, which I don’t expect to happen”, Peace said.
“We think the stock will struggle to re-rate, despite being the cheapest globally systemic bank”, Morgan Stanley analyst Huw Van Steenis wrote after the bank posted its record loss.
It follows Monday’s statement to investors when the bank said its 2016 payment capacity was estimated to be about EUR1bn (GBP783m), adequate to pay so called added grade 1 (AT1) coupons of around EUR350m on 30 April.
The market also expressed some concern about the adequacy of our legal provisions but I don’t share that concern. “We will nearly certainly have to add to our legal provisions this year but this is already accounted for in our financial plan”, he added. “The developments at Deutsche Bank show just how nervous investors are”. A small group of senior people, led by me, will focus on this.
Co-chief executive officer John Cryan is struggling to convince investors that he’s able to boost capital buffers and profitability by cutting costs and eliminating thousands of jobs as volatile markets undermine revenue and outstanding regulatory probes raise the spectre of continued legal charges. What are clients telling you?
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The cost of protecting Deutsche Bank’s subordinated debt rose for an eighth day.
