Deutsche Bank to “Resolve its Own Challenges” as Shares Drop to Record Lows

The bank has said it will solve its own problems, seeing no possibility of a capital increase.

Deutsche Bank has said it will resolve its own challenges without any reliance on help from Berlin, according to a statement from the lender, as shares in the German bank hit a record low of 10.62 today bringing losses down to around 53 percent this year.

Share prices plummeted after a German magazine reported over the weekend that Chancellor Angela Merkel had ruled out aiding the lender in its talks with US justice officials.

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Steffen Seibert, one of Merkel’s spokesmen, said there are “no grounds” for speculation over state funding for Deutsche Bank, adding that the government expects a “fair result” in the lender’s talks with the DOJ.

The case is in connection with allegations that the bank misled investors about the quality of subprime mortgage bonds it created and sold during the US housing boom which fueled the 2008 crisis. 

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Deutsche Bank is also facing inquiries into legal issues including precious metals trading and billions of dollars in transfers out of Russia, further complicating Cryan’s restructuring efforts.

No Question of Capital Increase

Nonetheless, Deutsche Bank is said to be determined to resolve its challenges on its own and has stated: “There is currently no question of a capital increase. We are meeting all regulatory requirements”.

In a statement which was sent to staff earlier this month, Deutsche CEO John Cryan reiterated a pledge to resolve “important litigation cases” as he restructures the bank, ruling out plans to sell the asset-management business to shore up capital ratios.

Falling Revenues

To add to the German lender’s woes, Finance Magnates reported quarter after quarter of declines in revenues and profits for Q2 2016, revealing net income of €20 million, compared to €818 million a year ago.

At the time, Cryan said: “If the current weak economic environment persists, we will need to be yet more ambitious in the timing and intensity of our restructuring.”

 

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