“Foreign-exchange markets are getting off to a cautious start this week”, said Ned Rumpeltin, European head of currency strategy at Toronto-Dominion Bank in London.
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Shares in Deutsche Bank have slumped to their lowest level in a quarter of a century following reports over the weekend that Germany’s Chancellor Angela Merkel has ruled out any state assistance for the lender, reviving fears that it could become severely under-capitalised. The index was down 1.74 percent.
The U.S. Justice Department has proposed that Deutsche Bank pay $14 billion to settle a set of mortgage-securities investigations stemming from the financial crisis, people familiar with the matter told The Wall Street Journal earlier this month.
Deutsche Bank has lost 53% of its equity market value so far this year.
Deutsche has maintained that it will not pay pay the $14bn bill sought by United States authorities.
“Clearly headlines around the DoJ settlement and those $14 billion continue to weigh on the stock”, Daniel Regli, an analyst at Main First, said by phone. A settlement range of $3 billion to $3.5 billion would leave the German lender room to settle other legal issues, while any additional $1 billion in litigation charges would erode 24 basis points in capital, JPMorgan Chase & Co. analysts wrote.
“There is no reason for such speculation as presented there and the federal government doesn’t engage in such speculation”, Steffen Seibert said during a regular government news conference.
Perhaps more significantly, but given less prominence in Focus Magazine’s prepublication release, Merkel has also ruled out any financial help for the bank in “election year 2017”. Seibert reiterates Germany expects a “fair result” in Deutsche Bank talks with US authorities. Bearish bets rose to 3% of shares outstanding on September 22 from nearly a three-month low of 1.7% on September 16, according to data compiled by Markit Ltd.
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Deutsche Bank AG reported its last Earnings on Oct 27 where the company reported Actual EPS of $0.45/Share. Year-to-date, DB has declined 47.2%.
