Deutsche Bank shares hit a record low again and state-backed lender NordLB scraps a 500 million euro bond sale amid investor concern over the financial industry in Europe’s largest economy. As David Pollard reports, the news was also capped by a report that Commerzbank aims to cut around 9,000 jobs and scrap its 2016 dividend.
Shares hit as investors fret over German banks
It’s coffee time for these Commerzbank workers.
But 9,000 of their colleagues may soon make a more permanent exit.
Sources tell Reuters the job cuts – nearly a fifth of its workforce by 2020 – are now part of its plans to reduce costs.
That and scrapping its 2016 dividend.
(SOUNDBITE) (German) HEAD OF ANALYSIS OF CAPITAL MARKET AT BAADER BANK, ROBERT HALVER, SAYING:
“The banks, including Commerzbank, have to react to the situation out there. There’s barely any interest rate business, we have an economy that isn’t really running smoothly. Competition in consumer banking is cutthroat and unfortunately that will lead to redundancies.”
The markets finding it hard to swallow in a week where Deutsche Bank has taken a battering.
Commerzbank’s shares down 2.8 per cent on its news – Deutsche’s hitting a record low …
After Germany’s biggest lender was forced to reassure investors.
It won’t need government help, it says, to meet potential US fines for misselling mortgage-backed securities.
(SOUNDBITE) (English) FIDELITY WORLDWIDE INVESTMENT, INVESTMENT DIRECTOR, TOM STEVENSON, SAYING:
“I don’t think we should be surprised that the German government is unwilling to step up to the mark and to bail Deutsche Bank out, to send money essentially to the US on behalf of Deutsche Bank…. A 14 billion euro fine compares with an 18 billion euro market capitalisation for Deutsche Bank, so it’s clearly pretty stretched and it is going to have come back to the market for more capital in some form.”
State-backed lender NordLB is scrapping its latest plan to raise more capital.
A 500 million euro bond sale halted.
It, Commerzbank and Deutsche also among those struggling to recoup tens of billion of dollars of loans from a crisis-hit global shipping industry.
Amid alarm bells over Germany’s banking sector, Hanjin and its peers not the only ones all at sea.