More gloom for Deutsche Bank? | FT Business - Germany's biggest lender has suffered a continued sell-off in its shares and bonds. Why has Deutsche Bank suffered more than its peers, and what is its chief executive doing to reassure investors? FT.com's financial editor Patrick Jenkins explains in 90 seconds. Published on Feb 9, 2016
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| Deutsche Bank stock down more 50% since July 31, 2015 (source: google.com) |
Here's What You Need to Know About CoCo Bonds - Video above: "Morning Must Read," Bloomberg’s Tom Keene discusses the function of CoCo bonds in light of concerns at Deutsche Bank with Mohamed El-Erian, chief economic advisor at Allianz and Bloomberg View columnist and Martin Gilbert, chief executive officer at Aberdeen Asset management. They speak on "Bloomberg ‹GO›." (El-Erian is a Bloomberg View columnist. The opinions expressed are his own.) Published Feb 9, 2016
Stock Exchanges: Symbols FWB: DBK and NYSE: DB
Europe's 'doom-loop' returns as credit markets seize up - Telegraph: 09 Feb 2016 "A string of dire results from banks have set off a firesale on "Cocos", bonds that allow lenders to miss a coupon payment and switch the debt to equity. A Unicredit issue of €1bn of Coco bonds has crashed to 72 cents on the euro. The iTraxx Senior Financial index measuring default risk for bank debt in Europe soared to 137 on Tuesday, from 68 as recently as early December. Mr Guglielmi said the mood is starting to feel like the panic in the summer of 2012 ..."
Frances Coppola, Feb 10, 2016: "The fundamentals have not changed and the longer-term trend is downwards. I suspect the recovery in Deutsche Bank’s share price will be short-lived ... It would be hard to see how including bank stocks in QE could avoid accusations of monetary financing of government, in breach of Article 123 of the Lisbon Treaty. And the moral hazard involved in the ECB acting as a backstop for bank stocks doesn’t bear thinking about. However, desperate times need desperate measures. It seems the market wants to believe that the ECB would intervene to prevent financial sector meltdown. “Whatever it takes” still resonates."
As Deutsche Bank Chief Turns to Legal Woes, Here's What He Faces - Bloomberg Business: "The bank is grappling with matters that many of its global rivals have put behind them -- including U.S. probes into its mortgage-backed securities business and into whether its traders colluded to manipulate currency rates. In a more recent development, the bank is being investigated by U.S. and U.K. authorities over whether its internal controls failed to catch some $10 billion in transactions that may have moved money out of Russia, people familiar with the matter have said. “You’ve seen a lot of the same issues for a lot of banks,” said Elliott Stein, a Bloomberg Intelligence litigation analyst. “The problem is they have so many. These issues are not going away, and the bank is not likely getting a discount for settling a lot at once.”"
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See also: Bad Results Foreshadow A Gloomy Future For Deutsche Bank - Forbes: "... underlying these exceptional expenses is a sustained revenue fall due to low interest rates. Interest rates are set to fall further, if anything. The prospects for DB’s private & business bank look pretty grim."
and A tempest of fear | The Economist: "... the malaise of European banking stocks has deeper roots. The fundamental problem is both that there are too many banks in Europe and that many are not profitable enough because they have clung to flawed business models. European investment banks lack the deep domestic capital markets that give their American competitors an edge. Deutsche, for instance, has only just resolved to hack back its investment bank in the face of a less hospitable regulatory environment following the financial crisis..."
and European Bank Nightmare Far From Over as Fines and Fintech Loom - Bloomberg Business
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