As rumours of possible German state intervention persist, Deutsche Bank is struggling to meet its capital and earnings targets according to figures from S&P Global Market Intelligence.
Prompted by the US Department of Justice demanding US$14bn to settle legal action over mortgage securities, market concern over Deutsche Bank’s capital and earnings has spilled over into rumours about a state-led rescue. The bank and the German government have issued several rounds of denials, the latest after German daily Die Zeit claimed on 28 September that work was underway on a rescue plan that potentially includes fresh capital for the bank.
Despite the denials, S&P says that Deutsche Bank is struggling and the bank’s results for the past several years show weakening equity, high leverage and a poor earnings record, while the gap between recent performance and the actual targets looks considerable.
S&P also notes that consensus estimates for the full year 2017 suggest that Deutsche Bank’s common equity Tier 1 ratio will come close to its 2018 target thanks in part to a reduction in risk-weighted assets, but they foresee weak returns around 4% – and downgrades cannot be ruled out. The bank’s shares have more than halved in value so far this year, and its market capitalisation has fallen below €15bn.
The major oil producers have agreed a further reining-in of production in a bid to push the price higher.
The General Data Protection Regulation (GDPR) will be enacted on May 25 2018 and promises to revolutionise the way that firms collect, store, process and protect the personal information of customers, clients and employees.
Today sees the publication of set of global principles of good practice in the foreign exchange market.
The one-notch downgrade by the credit ratings agency is the first for nearly 30 years.