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Deutsche faces a potential US cut back

Monday, October 17, 2016 - 01:52

Deutsche Bank needs to move quickly to boost capital and deliver healthy profits if it is to restore investor confidence, but as Rosanna Philpott reports, its room for maneuver appears limited.

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Plagued by a massive fine and a slump in its share price, Deutsche bank needs to move quickly if it's to restore investor confidence. But the German lender's room for manoeuvre is limited. (SOUNDBITE) (English) REUTERS SENIOR CORRESPONDENT IN FRANKFURT, ED TAYLOR, SAYING: "Deutsche bank currently doesn't have a very good equity story with which it can approach investors to persuade them with which to invest in the stock, that's the main problem they have. If the Department of Justice fine is too big they may be forced to raise some money as an emergency step." John Cryan took over as CEO last year... Announcing bold plans to cut staff, trim overheads and sell off non-core businesses. Progress has been slow though, and now the bank faces a 14 billion dollar fine from the U.S. Department of Justice for mis-selling mortgage securities. That has exposed a capital shortfall of between 5 and 10 billion euros. Deutsche says it has no plans to raise cash. But while the DoJ settlement might ultimately come down a bit, the bank could face other fines over suspected money laundering. All this could leave Germany's flagship lender with limited options. (SOUNDBITE) (German) HEAD OF CAPITAL MARKETS ANALYSIS AT BAADER BANK, ROBERT HALVER, SAYING: "Deutsche Bank and Volkswagen, are having problems. They are facing big fines and now we need clarity: it must be made clear how high these fines will be. This impasse has a very detrimental impact on share prices." Sources telling Reuters that the bank is looking at a possible strategy shift in the United States. Abandoning its most important market looks unlikely... But it could scale down its activities there. Deutsche's one-fifth fall in revenue in the first half looks a lot like the scale of the year-on-year decline Britain's RBS suffered six years ago... That snowballed to leave RBS a husk of its former self.

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Deutsche faces a potential US cut back

Monday, October 17, 2016 - 01:52