Just hours after Deutsche Bank reached a landmark settlement with US regulators today, the group made efforts to alleviate concerns of its employees, touting its economic strength despite a litany of legal concerns, according to a Bloomberg report.
Earlier today, Deutsche Bank agreed in principle to a $7.2 billion deal with US authorities to resolve a probe into the alleged the wrongful sale of mortgage-backed securities, or toxic subprime debt. Moreover, the group also denied reports that it had breached any sanctions with Russia.
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Deutsche Bank had already been facing a number of other concerns, mostly of its own making, which were characterized by sagging revenues and lower profitability. Over the past year, the lender had been embarking on an aggressive cost-cutting strategy, a path Deutsche Bank’s CEO John Cryan has repeatedly backed.
Credit Rating Not Affected
Per its latest settlement however, Deutsche Bank distributed a memo, asserting that the resultwill not affect its credit rating or its ability to operate in the United States. Interestingly, the bank is also rumored to be creditor to US President-elect Donald Trump, though reiterated it did not expect to receive preferential treatment.
Concerns were originally raised after a potential weakening of the bank’s ability to pay coupons on some of its bonds – this in turn triggered a share price drop earlier in 2016, though today’s news has hardly moved the needle during US trading Friday. At the time of writing, shares of Deutsche Bank (NYSE:DB) are operating in positive territory, settling at $18.59, or up 0.30%.
According to a recent memo released by the bank: “By agreeing this settlement, we are removing a long-standing uncertainty from Deutsche Bank. We anticipated that the credit market will welcome the sentiment. We anticipate paying coupons on all of our instruments on time and in full.”