Germany’s largest lender admits it has an image problem with investors as fresh concerns over its stability emerge, sending its shares sharply down on global indices. Jo Webster reports.
Deutsche seeks to reassure as shares plunge
Deutsche Bank shares taking ANOTHER lurch lower on Friday…
The bank admitting it has an “image problem”…
After reports say some hedge funds have pulled money out.
SOUNDBITE (English) REUTERS BREAKINGVIEWS COLUMNIST, DOMINIC ELLIOTT, SAYING:
“It’s clear that Deutsche Bank has a lot of hedge funds as clients. So if this is say 10, which is an upper estimate, it’s got 200 in total. So it’s not as if this is all of Deutsche Bank’s clients suddenly withdrawing cash. However, this is the start, potentially, so that’s why investors are worried.”
Deutsche says its trading clients remain largely supportive.
A statement from the bank on Friday reads….. “We are confident the vast majority of them have a full understanding of our stable financial position, the current macroeconomic environment, the litigation process in the U.S. and the progress we are making with our strategy’.
Germany’s biggest lender was slapped with a 14 billion dollar fine from the U.S. Justice Department earlier this month…
IT claims Deutsche mis-sold mortgage-backed securities before the 2008 financial crisis.
The bumper fine – which Deutsche says it expects to negotiate lower – has triggered jitters about the financial solidity of the bank.
(SOUNDBITE) (English) INDEPENDENT MARKET ANALYST, JEREMY BATSTONE-CARR, SAYING:
“At this moment in time, it feels really binary. Deutsche Bank will either collapse or it will revive and at ten euros a share, we’re pretty much at the point where very important decisions have to be made by the German government, by the European Central Bank, by shareholders.”
Once Germany’s flagship on Wall Street, it barely scraped through European stress tests in July.
The country’s lenders ALL under pressure from record low interest rates.
The German government denies any plans for a bailout.
But some investors think the Chancellor may have few other options left.