Deutsche Bank and its biggest investor sought to reassure shareholders and staff of its financial strength after a ratings downgrade on Friday questioned its ability to implement a plan to return to profitability.
Shares in the bank closed at an all-time low on Thursday as past misadventures in high-risk investment banking stymied the new chief executive Christian Sewing’s attempt to refocus on its more staid corporate banking roots.
A source familiar with the thinking of the European Central Bank, which regulates Deutsche Bank, and its top shareholder HNA Group of China, said they backed the management’s strategy of retrenchment.
This followed a report on Thursday in the Wall Street Journal that the US Federal Reserve viewed the lender as troubled last year, and on Friday Standard & Poor’s downgraded Deutsche’s credit rating from A- to BBB+.
In Australia, federal prosecutors are preparing criminal cartel charges against Deutsche, ANZ and Citigroup, over a A$2.3bn (£1.3bn) share issue. All deny wrongdoing.
Sewing, a Deutsche Bank “lifer” appointed in April after the removal of chief executive John Cryan, said in a letter to staff: “At group level, our financial strength is beyond doubt.”
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Yeah, right. I guess they gave too many loans to the Greeks and the Italians...
