Category Archives: Deutsche Bank P.O.

P.O. +++ (BI) Deutsche Bank exec says €46 trillion derivatives book isn’t as risk as it sounds

P.O.

   “Deutsche Bank exec says its €46 trillion derivatives book isn’t as risky as it sounds”

…In my opinion what Mr John Cryan says is not true.

…When you are involved in,give or take, twenty per cent of the world’s derivatives,the risk is huge.

…Plus the fact, even with the current safeguards, that a major default might rock the whole system.

   And Deutsche Bank is not exactly good at measuring risk, is it…?

   Francisco (Abouaf) de Curiel Marques Pereira

(Business Insider) Deutsche Bank is continuing to cut back the size of its derivatives book, which is not as risky as investors may believe, Chief Risk Officer Stuart Lewis told German weekly paper Welt am Sonntag.

“The risks in our derivatives book are massively overestimated,” Lewis told the paper. He said €46 trillion in derivatives exposure at Deutsche appeared large but reflected only the notional value of the contracts, while the bank’s net exposure to derivatives was far lower, at around €41 billion.

“The €46 trillion figure sounds gigantic, but it is completely misleading. The real risk is far lower,” Lewis said, adding that the level of risk on Deutsche Bank’s books was in line with that seen at other investment banking peers.

“We are trying to make our business less complex and are paring back our derivatives book. Parts of it were transferred into a non-core unit some years ago.”

New banking regulations imposed in the wake of the 2009 financial crisis discourage large bets on risky assets, and have forced Deutsche Bank to drastically cut back the scale of its derivatives exposure.
Derivatives are financial contracts that draw their value from the performance of an underlying asset, index or interest rate. They can be used to hedge risks.

+++ M.P.O./V.V.I. (BBG) Deutsche Bank Puts Safeguards to the Test: Mark Whitehouse

M.P.O.   

Having been involved in Financial Markets,in one way or another for more than fifty years, I can comfortably say that European laws and Regulations on resolution of banks are wrong and don’t work.

Some ideas in them are, from my point of view, correct, but the hierarchy and timings of the different steps turn them impossible to implement.

When there is a run to the bank, one has time for nothing except putting out the “fire”.

There is a zero chance that these laws and regulations will ever be used and work, in a bank with a large market share.

Among many other things, because in such a case the rest of the banks that would be supposed to “bail it in”, wouldn’t have enough capital to do so…

It has been said lately that that there is no such thing as a bank “too big to fail”.

This statement is not true, full stop.

It is the commercial banks that create money when they lend.

The failing of a large bank not only would spread to the other banks and the entire Financial System, but would destroy such a large amount of money that failing would not be an option.

All the rest you hear on this issue is crap.

Crap to throw away down the garbage can.

And in this case, and in my opinion again, in such an eventual scenario, Deutsche Bank would certainly be too big to fail.

Deutsche Bank is involved in twenty per cent of all the derivatives in the World.

Can you imagine what one trillion US dollars is?

Deutsche Bank’s exposure in the derivatives market is anywhere between 200 and 1000 trillion US dollars…

No responsible government would allow it to fail.

Regardless of what you hear the politicians say.

Even Lehman Brothers would not be allowed to fail, with what we know today.

[Letting Lehman fail is among the ten worse economic decisions taken by any government in the last century]

And in this eventual scenario the final decision would be taken after talking to, among others, Washington,London,Bern,Tokyo and Beijing.

Regardless of what you hear the politicians say.

Francisco (Abouaf) de Curiel Marques Pereira

Post ScriptumWhat I wrote above does not change in any my opinion, which I have had for a number of years, on Deutsche Bank.

Belly up!

That’s what I think DB is…

(BBG) The travails of Deutsche Bank, which has seen its share price plunge to record lows amid concerns about the size of a looming U.S. fine, raise a crucial question: If the German bank needed salvaging, could authorities pull it off without damaging the rest of the financial system?

Judging from the reaction so far, markets aren’t so sure.

Spurred by the disastrous experience of the 2008 crisis, regulators have created various safeguards designed to ensure that distress at a large financial institution won’t trigger contagion. Europe’s Single Resolution Mechanism, for example, is supposed to allow them to swoop in quickly and recapitalize a big bank — largely at the expense of creditors — with little or no adverse effect on all the other institutions that do business with it.

Financial Contagion

The Deutsche Bank case offers a unique opportunity to see what markets think about regulators’ plans. After all, the threat of a big fine shouldn’t be a systemic event: It applies to a specific institution. If markets believe the resolution mechanism will work, they should focus their concerns on Deutsche Bank, not on others.

So what’s the verdict? Not comforting. Since mid-September, when Deutsche Bank announced that the U.S. Justice Department was seeking $14 billion to settle a probe tied to mortgage securities, measures of credit risk have risen for banks throughout Europe and beyond. Here’s a chart showing the percentage increase in the cost of five-year default insurance on the senior debt of Deutsche Bank and the largest banks in France, Italy, the U.K. and the U.S.:

To be sure, resolution mechanisms are still works in progress. For one, banks have yet to build up special layers of debt that regulators can “bail in” when they need to shore up an institution’s finances. Still, the market’s reaction doesn’t suggests much confidence. It also reflects the recognition that the world’s largest banks — Europe’s in particular — are still so thinly capitalized that it wouldn’t take much to send them into distress.

Ample loss-absorbing equity capital — that is, money from investors willing to share in banks’ risks — is among the best antidotes to financial contagion. Instead of pretending that they can safely handle the failure of a systemically important bank, regulators should demand a lot more of it.

+++ M.P.O./V.V.I. (JN) Merkel sem margem para resgatar Deutsche Bank

M.P.O.

Excertos da minha M.P.O. de hoje:

«The failing of a large bank not only would spread to the other banks and the entire Financial System, but would destroy such a large amount of money that failing would not be an option.

All the rest you hear on this issue is crap.

Crap to throw away down the garbage can.

And in this case, and in my opinion again, in such an eventual scenario, Deutsche Bank would certainly be too big to fail.

Deutsche Bank is involved in twenty per cent of all the derivatives in the World.

Can you imagine what one trillion US dollars is ?

Deutsche Bank’s exposure in the derivatives market is anywhere between 200 and 1000 trillion US dollars…

No responsible government would allow it to fail.

Regardless of what you hear the politicians say.

Even Lehman Brothers would not be allowed to fail, with what we know today.

(Letting Lehman fail is among the ten worse economic decisions taken by any government in the last century)

And in this eventual scenario the final decision would be taken after talking to, among others, Washington,London,Bern,Tokyo and Beijing.

Regardless of what you hear the politicians say.»

Francisco (Abouaf) de Curiel Marques Pereira

(JNA posição dura que Merkel apresentou quanto à ajuda estatal noutros países europeus é a justificação dos media alemães para a incapacidade de avançar com resgate.

O Deutsche Bank viveu, na semana passada, um dos períodos mais conturbados da sua história. Em bolsa, as acções renovaram mínimos históricos, à medida que se acentuaram os receios de que poderia precisar de ajuda do Estado. Mas o presidente da instituição veio pôr água na fervura. E, no fim-de-semana, os media alemães foram unânimes na defesa de que Angela Merkel não terá margem para resgatar o banco.

 

“Claro que a chanceler Merkel não vai querer dar ao Deutsche Bank qualquer ajuda estatal”, escreveu o Frankfurter Allgemeine, citado pela Reuters. “Não vai poder permiti-lo do ponto de vista da política externa porque Berlim seguiu uma linha dura em relação ao resgate de bancos em Itália”, justifica. O jornal frisa que a Alemanha, que insistiu para que países como Itália e Portugal aceitassem condições mais duras para resolver os problemas da banca, não pode permitir-se ser vista como branda a lidar com a situação do maior banco do país.

 

Já o Sueddeutsche Zeitung sublinha que, ao ajudar o banco, Merkel estaria a quebrar uma promessa aos contribuintes, o que poderia afectá-la na sua caminhada para a re-eleição no próximo ano e permitir que as forças anti-imigração ganhem terreno. “Um pacote de ajuda estatal levaria os eleitores para os braços do AfD [o partido anti-imigração]”, refere o editorial deste jornal, citado pela Reuters. “As considerações políticas internas tornariam improvável que Berlim jogasse esse jogo. E ainda mais improvável é que a Comissão Europeia concordasse. O risco político seria simplesmente demasiado alto”, escreve.

 

“O Deutsche Bank tem que ganhar algum terreno porque tanto como podem ter sido exagerados os relatórios que apontavam para os perigos, também são óbvias as suas dificuldades”, diz o Stuttgarter Zeitung . “A confiança é o que os bancos têm de mais importante”, sublinha.

 

Uma posição em linha com a de Christine Lagarde. Na sexta-feira, a directora do Fundo Monetário Internacional (FMI) revelou, em entrevista à CNBC, que o banco não precisa de apoio público, mas frisou que são “necessárias medidas” para fortalecer o banco.

 

A tensão aliviou, no final da semana passada. Primeiro, foi divulgada a comunicação interna do presidente executivo, John Cryan, aos funcionários. Neste documento, citado pela Bloomberg, o responsável realça que, “nas últimas duas décadas”, o balanço do banco nunca foi “tão estável”. Para Cryan, o banco tem sido alvo de “especulação dos media” e que o “trabalho [do Deutsche Bank] é assegurar que esta percepção distorcida não tem um impacto forte no negócio do dia-a-dia”.

 

Além disso, ao final do dia de sexta-feira, surgiram notícias de que o banco estaria perto de chegar a um acordo com o Departamento de Justiça dos Estados Unidos no sentido de reduzir a multa que lhe vai ser aplicada. As primeiras notícias, conhecidas em Setembro, apontavam para uma coima de 14 mil milhões de dólares no âmbito de processos relacionados com o “subprime”. Mas a AFP avançou, na sexta-feira, que esta coima pode acabar por ser de 5,4 mil milhões de dólares. O Telegraph revelou, no domingo, que o presidente do banco estará, esta semana, nos EUA, devido às reuniões do Banco Mundial e do FMI, pelo que poderá aproveitar para continuar a negociar com as autoridades americanas.

P.O. V.V.I. (BBG) Padoan Says Any Deutsche Bank Plan Must Respect EU Rules: Stampa

P.O.

…That is the question…

…And this is the mind breaking puzzle Berlin has to solve…

…Germany will not have the slightest break from the other euro Countries…

…It will have to bite it’s own venom…

…Let’s hope it will produce the desired and correct effect…

Francisco (Abouaf) de Curiel Marques Pereira

(Bloomberg) — Any state or market plan for Deutsche Bank would have to be within the rules of the European banking union, Italian Finance Minister Pier Carlo Padoan says in interview with newspaper La Stampa.

* Just as the problems of non-performing loans “must be
resolved in a reasonable period of time, that must the case
too for those of Deutsche Bank”
* Asked whether bail-in rules should be applied if there is
German state intervention, says: “We all have problems, we
don’t need punitive solutions, but common solutions. We
often forget it, but financial stability serves citizens
before bankers”
* “Without doubt there are still points to clarify” with
European Commission on Italian budget flexibility
* U.K. delay in triggering Brexit process weighs “a great
deal” on European Commission, says responsibility is not
only Downing Street’s: “I fear a year-long stall, awaiting
the German and French elections”

+++ P.O. (BBG) German Finance Sector is Generally Awful, Says Choukeir – Video

P.O.

…Ahhh…

…Is that so…?

…Give me a break and tell me something new…!

…Most of the “German Finance Sector” Companies are belly up…

…And they have been belly up for years…

…People have just not been focusing on them because of the German Accounting System which is good for insiders,because it communicates privileged information, but difficult to understand for outsiders.

…It’s like Germany’s accounts…

…You go and tell me what is the real debt to GDP ratio for Germany…

…But take a deep breath, and do your homework before you answer me…

Francisco (Abouaf) de Curiel Marques Pereira

(BBG – Click to see) September 30 — Deutsche Bank AG slid in European trading after losing 6.7 percent in the U.S. to a record low $11.48 on Thursday. About 10 hedge funds that do business with the German lender moved to reduce their financial exposure as concern grows about its ability to withstand pending legal penalties. Kleinwort Benson Bank Chief Investment Officer Mouhammed Choukeir discusses with “On the Move” hosts Guy Johnson in London and Caroline Hyde in Frankfurt.

+++ P.O. (BBG) Deutsche Bank Is Still Processing Legacy Problems: Dijsselbloem

P.O.

…You don’t tell me…Brexit problems?…No way!…Deutsche Bank has been belly up for years!

…And I have been  saying so for years!

FCMP

(Bloomberg) — Deutsche Bank “has to reduce its complexity, increase its capital ratios, reduce its costs, and find a solution for Brexit,‘‘ Dutch Finance Minister Jeroen
Dijsselbloem says Tuesday while speaking to reporters at SNS Bank’s offices in Utrecht.

* ‘‘A couple of banks in Europe are still dealing with
processing the after-effects of the 2008 financial crisis
and the period before that. Deutsche Bank belongs to
those.”
* NOTE: Dijsselbloem, who heads Eurogroup of euro-area finance
ministers, said earlier that Deutsche Bank needs structural
adjustments

+++ O.P. (RTT) Deutsche Bank To Sell Its Abbey Life Business To Phoenix Life

P.O./O.P….

 Lá se vão os anéis…

…O problema é que se não sabe se ficam os dedos, de tão carcomidos pelo mal que estão…

A minha “impressão” é que os anéis também estão podres…

O que tem estado a acontecer é que, face à imensidão dos “buracos”, e em consequência da conhecida opacidade do balanço, o Deutsche Bank tem estado a vender os anéis para cobrir rácios e problemas diversos…

Mas os mercados estão sanguinários…

   E portanto duvido que o problema tenha solução.

E já perceberam que têm o Deutsche encostado às traves…

Porque quanto mais joias da coroa venderem  com menos “história” ficam.

E essa história será muito necessária para colocar acções no inevitável aumento de capital.

  Mas mesmo nessa hipótese duvido que sobreviva.

 

Francisco (Abouaf) de Curiel Marques Pereira

(RTT) Deutsche Bank (DB) announced it has reached an agreement with Phoenix Life Holdings Limited, a subsidiary of Phoenix Group Holdings Limited, to sell its Abbey Life business for 935 million pounds. Deutsche Bank noted that the transaction will result in an expected pre-tax loss of approximately 800 million euros, primarily resulting from impairment of goodwill and intangible assets.

John Cryan, CEO of Deutsche Bank, said: “Deutsche Asset Management will continue to focus on its core businesses of Active, Passive and Alternatives, while this transaction will also strengthen Deutsche Bank’s capital position. We continue to build a simpler and better Deutsche Bank.”

Deutsche Bank said the sale will have a net positive capital impact upon closing of the transaction and, on a pro-forma basis, would have improved Deutsche Bank’s Common Equity Tier 1 capital ratio as of 30 June 2016 by approximately 10 basis points.

+++ P.O. (BBG) Deutsche Bank to Take $895 Million Hit on Abbey Life Unit Sale

 P.O.

…A Fire Sale…

…It just shows how desperate the management is…

…I am afraid it’s very bad news…

…Very bad news indeed…

Francisco (Abouaf) de Curiel Marques Pereira

(BBG) Phoenix Group Holdings said it’s buying Deutsche Bank AG’s U.K. insurance unit Abbey Life Assurance Co. for 935 million pounds ($1.2 billion).

The U.K. consolidator of closed-life insurance businesses said it will fund the deal with a share sale along with a banking facility, according to a statement Wednesday. The German lender said it will book a pretax loss of about 800 million euros ($895 million) from the sale.

Deutsche Bank CEO John Cryan, under pressure to shore up earnings and bolster the balance sheet, is selling the unit after new European regulations in January forced firms with insurance assets to hold more capital. While the lender is losing money on the Abbey Life sale, the bank said the deal is expected to lift its Common Equity Tier 1 capital ratio by about 10 basis points from the June 30 level.

“We continue to build a simpler and better Deutsche Bank,” Cryan said in a statement. “This transaction will also strengthen Deutsche Bank’s capital position.”

Mounting legal bills have led analysts to question the lender’s ability to avoid selling assets or take other steps to raise capital. While a public offering of its German Postbank consumer division has been put on hold, the debate over Deutsche Bank’s finances intensified after it was disclosed that the U.S. Justice Department is seeking $14 billion to resolve a probe of the lender’s pre-crisis mortgage securities business.

Phoenix is planning to raise about 735 million pounds in stock to help fund the purchase, along with a 250 million-pound banking facility, it said. The deal will add 10 billion pounds to assets under management, about 735,000 policyholders and will increase dividends by 5 percent in 2017 to 197 million pounds, the company said.

“This attractively-priced deal meets precisely Phoenix’s areas of strategic focus and stated acquisition criteria, whilst significantly increasing our cash generation and supporting a further increase in our proposed dividend,” said Phoenix Chief Executive Officer Clive Bannister.

Bannister, who has focused on cutting costs and debt at the company since he joined in 2011

P.O. (BBG) Deutsche Bank Returns as Merkel’s Election-Year Nemesis

P.O.

…Let´s see if the EU bank help rules apply in Deutsche Bank’s case…

…I am very curious about it…

…Because if they don’t apply the EU would be finished…!

…It would lack any kind of credibility…!

…And if you point a gun at my head I would say that  my guess would be that they will not apply…

Francisco (Abouaf) de Curiel Marques Pereira

(BBG) In April 2008, as the global financial crisis was brewing, Angela Merkel hosted a 60th birthday reception in her Berlin chancellery for Deutsche Bank’s then-chief executive Josef Ackermann. Eight years later, her government is doing its best to keep Germany’s biggest bank at arm’s length.

Chastened by a series of government clashes with Deutsche Bank, the lender’s financial woes are the last thing Merkel needs as she considers running for a fourth term. After a magazine article stirred speculation, Merkel’s spokesman moved swiftly to stem the notion that the lender might require state aid as the US seeks a multibillion dollar fine, with negotiations opening at $14 billion.

“It’s unimaginable that we would help Deutsche Bank with taxpayers’ money,” Hans Michelbach, a senior lawmaker in Merkel’s Christian Democrat-led bloc, said in an interview. “It would lead to a public outcry. The political establishment would lose credibility if the government jumped in.”

For Merkel, any whiff of government action would be electorally toxic just as she faces a backlash against her refugee policy, unrest in her party bloc and slumping poll ratings. She declined to comment Tuesday on whether Deutsche Bank’s woes warrant government help.

“The only thing I want to say is that Deutsche Bank is part of the German banking and financial sector and that of course we wish that all companies, also if they’re having temporary difficulties, can develop well,’’ the chancellor said in reply to a reporter’s question in Berlin.

Any rollback after years of cracking down on too-big-to-fail banks, pushing for a financial-transaction tax and putting the brakes on bank bonuses would be a near-impossible sell to a restless electorate. It would also clash with post-crisis European rules championed by Merkel and finance minister Wolfgang Schaeuble, which they sold to German voters as a way to avoid future taxpayer-funded bailouts.

“Anything that looks like giving money to the financial industry would be met with particular criticism in an election year,” said Joerg Rocholl, head of the ESMT business school in Berlin. Any bailout “would be viewed as an example of what people have criticized—that profits are privatized while losses are socialized,” he said.

Merkel honed her stance toward the financial industry during Europe’s debt crisis. While defending sovereign bailouts as necessary for keeping the euro area together, she portrayed the crisis as a battle for dominance between investors—she called them the “so-called markets”—and politicians responsible to their publics.

Deutsche Bank touched a record low for the second consecutive day, declining 2.8% to €10.24 euros at 12:48 pm in Frankfurt.

Merkel has political wounds from previous rounds of sparring with Deutsche Bank. She came under a hail of criticism after hosting Ackermann for his birthday party. Later that year her government slammed Ackermann for telling Spiegel Online that he would be “ashamed” to take government money. Three years later, they clashed at the World Economic Forum in Davos over how to manage the sovereign-debt crisis.

Merkel has been keeping her distance since. After the bank appointed John Cryan to replace co-CEOs Anshu Jain and Juergen Fitschen in June 2015, Merkel demurred when asked whether the changes could help restore the lender’s ailing finances.

“It had no surprise effect on me,” Merkel told reporters while attending a Group of Seven summit in Bavaria. “I want Deutsche Bank to be able to work successfully. It makes its own decisions, like any company in Germany.”

Deutsche Bank said on Monday it’s “determined to meet the challenges on its own.” Yet Merkel may come under pressure to intervene as the US justice department negotiates with the lender over the fine. The International Monetary Fund said in June that Deutsche Bank’s links to other lenders may make it the single biggest contributor to systemic risk among global banks.

German presence

While Merkel’s most ferocious critics heckled her on aid to Greece, she ultimately did whatever it took to guarantee stability and keep the euro intact. The same reasoning might apply when it comes to the survival of a bank whose roots go back to the founding of the German state.

“I don’t buy at all what’s coming out of Germany in terms of Germany not wanting to step in ultimately if Deutsche Bank was really in trouble—it’s too important for the German economy,” Andreas Utermann, chief investment officer at Allianz Global Investors, told Bloomberg Television.

Almost half of the bank’s 101,000 employees are based in Germany, as are 56% of its shareholders, according to Deutsche Bank’s last annual report. The majority of the bank’s €189 billion of consumer credit exposure at the end of 2015 was in Germany.

“We need an internationally operating bank that’s a partner for internationally operating companies,” Michael Fuchs, a lawmaker for Merkel’s Christian Democratic Union, said by phone.

EU rules

European Union law put in place after the financial crisis puts up high barriers for governments to give financial support to viable banks—something that’s hampering Prime Minister Matteo Renzi in seeking any direct rescue for Italian banks. A workaround for governments to help solvent banks is largely limited to addressing a capital shortfall identified in a stress test or asset-quality review.

Deutsche Bank’s deteriorating capital and mounting legal costs are already making it a topic for politicians in Berlin. Social Democratic lawmakers discussed the bank’s woes at a closed-door meeting last week, according to two people who knew of the event.

Merkel’s chief spokesman declined to confirm a specific meeting between Merkel and Cryan as suggested in the report by Germany’s Focus magazine, saying only that there was no one-on-one meeting in the last three months and that she meets with bank executives regularly.

“As far as the chancellor is concerned, there was no such meeting,” Seibert said. “It could come about—but I don’t know—that there was a larger group that may have included the chief of Deutsche Bank.”

M.P.O.+++ (BBG) Deutsche Bank Drops After Rebuffing $14 Billion DOJ Claim

M.P.O.   

Please revisit my Personal Opinions on Deutsche Bank.

No one that has read them should be surprised by these events.

Following the EU action against Apple a full scale trade and tax war has started, between the EU and the U.S.

As I have written in my Personal opinion

O.P. (BBG) U.S. Treasury Steps Up Pressure on EU Over Apple Tax Dispute

And in the following Opinions

+++ M.P.O. V.I. (BBG) Deutsche Bank Credit Primer:

«M.P.O.

As I wrote many times before , I am afraid that I can’t agree with the Rating Agencies…

But in this case, I am of the opinion that the situation of Deutsche Bank is much, much worse.

And I think that Deutsche Bank only has the current rating because it’s Deutsche and it is a German Bank.

With a Market Cap (as of today 17 August 2016) of 16,903.0 M euros (16.9 billion), and a few billion in provisions for legal costs, Deutsche Bank does not have the capital, nor the funds, to pay for the lowest estimate of the cost of the more than a thousand legal challenges it is facing.

To give an idea,and a very light one, and in just one case, please revisit my

+++ P.O. V.I. (BBG) Deutsche Bank Has Started U.S. Mortgage Settlement Talks

This kind of settlements with the U.S., have in the past sometimes toppled 10 billion US dollars…

And the worse is that, as some people argue, in Deutsche Bank’s legal settlement in U.S.-based litigation regarding precious metals manipulation, the settlement might be meaningless.

Please see Zeero Hedge’s article “The Deutsche Bank Settlement is Meaningless”
by Sprott Money Apr 29, 2016.

Please also revisit +++ V.I. (BBG) Deutsche Bank’s Pain Looks Set to Get Even Worse: Gadfly

And if one takes into account that they have to spend to restructure, there is no foreseeable end to DB’s troubles.

Let no one be fooled, or say they were not warned ahead.

Things will get much much worse before they will get any better.»

+++ P.O. V.I. (BBG) Deutsche Bank Has Started U.S. Mortgage Settlement Talks:

«P.O.

…Multi billion dollars…

…That was the settlement in other similar cases…

…One more hole in the balance sheet…

…As I wrote many many times…

…Also as I wrote before, I don’t think Deutsche Bank will ever get it’s act together…

…With all it’s implications…

…It’s in their ADN…

…Regardless of the Management.»

Got the picture ?

Francisco (Abouaf) de Curiel Marques Pereira

(BBG) Deutsche Bank AG’s shares and its riskiest bonds dropped the most since Brexit after the lender said the U.S. Justice Department is seeking $14 billion to settle a probe tied to residential mortgage-backed securities, more money than it’s willing to pay.

“Deutsche Bank has no intent to settle these potential civil claims anywhere near the number cited,” the company said in a statement early Friday in Frankfurt. “The negotiations are only just beginning. The bank expects that they will lead to an outcome similar to those of peer banks which have settled at materially lower amounts.”

Chief Executive Officer John Cryan, 55, has struggled to boost profitability by selling risky assets and eliminating jobs as unresolved legal probes and claims add to concerns that the lender will be forced to raise capital. Reaching a mortgage deal would clear a major hurdle for Deutsche Bank, which has paid more than $9 billion in fines and settlements since the start of 2008, according to data compiled by Bloomberg.

“While this number seems very large, it’s obviously a first negotiation point,” Chris Wheeler, an analyst at Atlantic Equities, told Francine Lacqua on Bloomberg Television. “There’s going to be an awful lot of management time spent on it to get to a sensible number.”

Deutsche Bank fell as much as 8.2 percent, the biggest intraday drop since June 27, and was down 7.6 percent at 12.10 euros at 12:36 p.m. in Frankfurt. Other European lenders probed in relation to residential mortgage-backed securities also declined, with UBS Group AG down 2.9 percent and Credit Suisse Group AG slipping 5.2 percent. Royal Bank of Scotland Group Plc slumped 4.5 percent, while Barclays Plc fell 2.8 percent.

The bank’s 1.75 billion euros ($2 billion) of 6 percent additional Tier 1 bonds, the first notes to take losses, fell 5 cents to 78 cents on the euro, the biggest drop since the U.K. voted to leave the European Union. Deutsche Bank’s 650 million pounds of 7.125 percent notes fell 5 pence to 81 pence on the pound, also a record fall.

“They are dropping like a stone,” said Tomas Kinmonth, a credit strategist at ABN Amro Bank NV in Amsterdam. “The fine, even if reduced, could surpass all provisions held by the bank.”

DOJ Negotiations

Germany’s government expects a “fair outcome” in the U.S. probe, a spokeswoman for the Finance Ministry in Berlin said on Friday.

Germany’s largest lender confirmed that it had started negotiations with the Justice Department to settle civil claims the U.S. may consider over the bank’s issuing and underwriting of residential mortgage-backed securities from 2005 to 2007. The Wall Street Journal reported the $14 billion claim on Thursday.

Bank of America Corp. paid $17 billion to reach a settlement in a similar case in 2014, the biggest such accord to date. Goldman Sachs Group Inc. agreed to a $5.1 billion settlement with the U.S. earlier this year, including a $2.4 billion civil penalty and $875 million in cash payments, to resolve U.S. allegations that it failed to properly vet mortgage-backed securities before selling them to investors as high-quality debt. The settlement included an admission of wrongdoing.

The Justice Department, in concluding previous investigations into the sale of mortgage-backed securities that soured during the financial crisis, typically has presented initial penalties higher than what banks ultimately paid, people familiar with those negotiations have said. The sides may negotiate over the final tab, as well as what conduct the bank will acknowledge and whether individuals will be sanctioned.

‘Shareholder Money’

Justice Department spokesman Peter Carr declined to comment on the negotiations.

JPMorgan Chase & Co. analysts wrote in a note to clients earlier Thursday that a settlement of about $2.4 billion “would be taken very positively,” and that an agreement exceeding $4 billion would pose questions about Deutsche Bank’s capital positions and force it to “build additional litigation reserves.” The lender’s common equity Tier 1 ratio, a key measure of financial strength, was at 10.8 percent at the end of June.

“In defense of protecting its shareholders’ money, Cryan is well within his rights in negotiating a more equitable and just settlement with the U.S. government, and calling this one a punishment that’s several orders of magnitude greater than the crime,” said Tony Plath, a finance professor at the University of North Carolina. Plath expects a final settlement of about $4 billion to $5 billion.

Settlement Goal

Cryan has said that he aims to settle major outstanding legal issues as soon as possible as part of his wider overhaul. Deutsche Bank had 5.5 billion euros set aside for settlements and fines at the end of June, with Chief Financial Officer Marcus Schenck saying in July that the lender will probably face “material” litigation charges in the second half.

In addition to the U.S. mortgage investigation, Deutsche Bank faces litigation and regulatory probes relating to issues such as foreign-currency rate manipulation and precious metals trading. The German bank is a party to 47 civil actions concerning the setting of interbank lending benchmarks, according to its 2015 annual report published in March.

“Obviously I don’t like this amount, it’s too high and it seems that with every settlement, the DOJ wants to get more from European companies,” said Andreas Domke, a portfolio manager at Allianz Global Investors, which owns shares in the lender. “It’s good that Deutsche Bank is pushing back.”

+++ M.P.O. V.I. (BBG) Deutsche Bank Credit Primer

M.P.O.

As I wrote many times before , I am afraid that I can’t agree with the Rating Agencies…

But in this case, I am of the opinion that the situation of Deutsche Bank is much, much worse.

And I think that Deutsche Bank only has the current rating because it’s Deutsche and it is a German Bank.

With a Market Cap (as of today 17 August 2016) of 16,903.0 M euros (16.9 billion), and a few billion in provisions for legal costs, Deutsche Bank does not have the capital, nor the funds, to pay for the lowest estimate of the cost of the more than a thousand legal challenges it is facing.

To give an idea,and a very light one, and in just one case, please revisit my

+++ P.O. V.I. (BBG) Deutsche Bank Has Started U.S. Mortgage Settlement Talks

This kind of settlements with the U.S., have in the past sometimes toppled 10 billion US dollars…

And the worse is that, as some people argue, in Deutsche Bank’s legal settlement in U.S.-based litigation regarding precious metals manipulation, the settlement might be meaningless.

Please see Zeero Hedge’s article “The Deutsche Bank Settlement is Meaningless”
by Sprott Money Apr 29,2016.

Please also revisit +++ V.I. (BBG) Deutsche Bank’s Pain Looks Set to Get Even Worse: Gadfly

And if one takes into account that they have to spend to restructure, there is no foreseeable end to DB’s troubles.

Let no one be fooled, or say they were not warned ahead.

Things will get much much worse before they will get any better.

Francisco (Abouaf) de Curiel Marques Pereira

ffffmmtthhjuiuoop

+++ P.O. V.I. (BBG) Deutsche Bank Has Started U.S. Mortgage Settlement Talks

P.O.

…Multi billion dollars…

…That was the settlement in other similar cases…

…One more hole in the balance sheet…

…As I wrote many many times

…Also as I wrote before, I don’t think Deutsche Bank will ever get it’s act together…

…With all it’s implications…

…It’s in their ADN…

…Regardless of the Management.

Francisco (Abouaf) de Curiel Marques Pereira

FCMP

Note: Please see +++ V.I. (BBG) Deutsche Bank’s Pain Looks Set to Get Even Worse: Gadfly

(BBG) Deutsche Bank AG is nearing an agreement with the U.S. Department of Justice to settle a long-running investigation into its mortgage-backed securities business.

The bank is in talks “concerning a potential settlement of claims that the DOJ may consider bringing, based on its investigation of Deutsche Bank’s residential mortgage-backed securities origination and securitization activities,” the firm said Wednesday in its second-quarter earnings report.

Germany’s biggest bank has paid more than $9 billion in fines and legal settlements worldwide since the start of 2008, according to data compiled by Bloomberg. That includes settlements related to violations of U.S. sanctions, rigging of interest-rate benchmarks and allegations that it defrauded U.S.-backed mortgage issuers Fannie Mae and Freddie Mac.

U.S. authorities have already extracted more than $44 billion in fines from other banks for their role in creating and selling subprime mortgage bonds that helped spur the 2008 financial crisis. Goldman Sachs Group Inc. said in April it will pay $5.1 billion to resolve U.S. allegations that it failed to properly vet mortgage-backed securities before selling them to investors as high-quality debt.

Royal Bank of Scotland Plc said earlier this year that it was also in settlement talks with the U.S. for its handling of mortgage securities. The firm is expected to pay a multi-billion dollar penalty, according to analysts.

The U.S. government’s mortgage-backed security resolutions stem from a working group of prosecutors and other officials that President Barack Obama ordered up in 2012 to punish Wall Street for fueling the financial crisis with bonds linked to souring mortgages. Until then, the Justice Department had been pilloried for years for not having brought significant cases against banks and their executives.

+++ P.O. (BBG) Deutsche Bank U.S. Loan Trader William Dobson Said to Leave Firm

P.O.

…Deutsche BanK ?…

…No comment…

FCMP

(Bloomberg) — William Dobson, who helped lead U.S. loan trading at Deutsche Bank AG, has departed, according to people with knowledge of the matter.

Dobson, 48, left on Tuesday, said the people, who asked not to be identified discussing personnel. He co-led loan trading with Mike Eilert until February, when Eilert became sole head of the group, one of the people said.

Dobson and Amanda Williams, a spokeswoman at the Frankfurt-based bank, declined to comment.

+++ P.O. (BBG) A $541 Million Loss Haunts Deutsche Bank And Former Trader Dixon

P.O.

…Deutsche Bank again…?

…I am afraid that I can only say…

…I told you so…

…Please revisit my numerous Personal Opinions on Deutsche Bank, and that are now all together in the recent Category Deutsche Bank P.O.                     

   And, as I wrote before,the odds are that this kind of losses related to “unusual” events are going to continue.

   It certainly looks like the Management is incapable of controlling “weird” events at the Bank.

   The question of course is until when…

   Francisco (Abouaf) de Curiel Marques pereira

(BBG) Troy Dixon had hit the big time: he’d gone, as they say in his old neighborhood, from “Hollis to Hollywood.”

It was a June night last year at the Apollo Theater, the legendary Harlem spot that’s helped launch stars from Billie Holiday to Michael Jackson, and Dixon was back-slapping his way through the annual spring gala.

Dixon, a member of the Apollo’s celebrity-studded board, is a star of a different sort. First at Deutsche Bank AG and now at his own hedge fund, he’s become one of the most powerful — and controversial — figures in the $6 trillion market for government-backed mortgage bonds.

The story of his journey from Hollis, a working- and middle-class neighborhood in Queens, to the pinnacles of finance is a tale of outsize trades and power plays. In the arcane world of mortgage securities, no one was bigger, no one bolder. At one point, Dixon built up a $14 billion position, among the largest anywhere at the bank. Word spread that he effectively controlled a quarter of his target market, inspiring awe and ill-will among rivals, even within his own bank, and raising eyebrows at the Federal Reserve Bank of New York.

Trading Loss

Only now, more than two years after Dixon struck out on his own, the story of his meteoric rise has become something else too: a tale of a half-billion-dollar trading loss that has belatedly drawn the attention of federal authorities.

At issue is who is ultimately responsible for losses that Deutsche Bank ran up in the aftermath of the 2008 financial crisis, when Dixon, now 44, ran a mortgage-backed trading desk there. The Securities and Exchange Commission wants to know what happened and, specifically, how the German bank accounted for certain bonds as they lost value. A whistle-blower has filed a complaint with the SEC claiming the bank inflated some of the values, according to people with knowledge of the complaint.

Neither Dixon nor Deutsche Bank has been accused of wrongdoing by authorities. Representatives for Dixon and the bank declined to comment about the inquiry, as did a spokeswoman for the SEC. Deutsche Bank has said it’s cooperating with the SEC.

It’s a remarkable turn of events for Dixon, who has been hailed as one of the most powerful African-Americans on Wall Street by Black Enterprise magazine.

‘Market Leader’

“He was a market leader — always a market leader,” says Sachin Jhangiani, a former colleague.

Charismatic and confident, Dixon exudes an aura of success, friends and acquaintances say. Malick Fall, executive director of Boys Hope Girls Hope of New York, a charity Dixon is involved in that helps at-risk children, recalls meeting Dixon on the Deutsche Bank trading floor in Lower Manhattan in 2011.

“He’d just come back from the gym and had sweat pants on. Everyone else was in a suit and tie, and everyone you saw was white,” Fall says. “To see this young African-American guy, not much older than me, just walking around in his sweat pants and running the whole floor was just amazing.”

Hollis Park

The name of Dixon’s $280 million hedge-fund firm, Hollis Park Partners, traces the arc of his life, from his old Queens neighborhood of Hollis, birthplace of the seminal hip-hop group Run-DMC, to Duane Park, a wedge of green in Manhattan’s fashionable TriBeCa, where he lives today.

Monte Chandler, a lawyer who has known Dixon since high school, says he realized how far his friend had come when the rapper Derrick Jones, known as D-Nice, performed at Dixon’s 42nd birthday party at the trader’s home in the Hamptons, the summer playground of moneyed Manhattan.

“We used to run around listening to D-Nice,” Chandler says. “And there he was, in Troy’s living room.”

For Deutsche Bank, the questions swirling around the old losses in many ways exemplify how far the bank has fallen. Rocked by one scandal after another on both sides of the Atlantic, the bank is confronting one of the most turbulent transformations in its 146-year history. Many investors doubt John Cryan, the chief executive officer, will restore the bank to its former glory any time soon. Over the past year, the stock has lost nearly half its value.

Structured Credit

Dixon, meantime, has sailed higher at Hollis Park, which specializes in structured credit. His fund posted a return of more than 7 percent in 2015, according to a person with knowledge of the firm, besting the average return of about 2 percent in its class.

Wall Street seemed like another planet when Dixon was growing up in Hollis, as the only child in a working-class family from Harlem, people who know him say. But even then Dixon commanded instant respect. Recruited to play football at College of the Holy Cross, a prestigious Jesuit college in Worcester, Massachusetts, he initially wanted to become a doctor. Then a former teammate who worked in finance showed him around the trading floor of Kidder, Peabody & Co.

Dixon was hooked. In 1994, he joined Salomon Brothers, an early pioneer in mortgage securities. From there he worked at several other banks, including Credit Suisse Group AG, where he cultivated a reputation as a savvy risk taker, according to Jhangiani, who worked with him at the Swiss bank. Dixon then moved on to UBS Group AG and finally landed at Deutsche Bank in 2006, just as the subprime era was approaching its denouement.

Interviews with people close to Deutsche Bank and internal bank documents sketch out what happened next.

Opportunity

As the 2008 financial crisis hit, Dixon smelled opportunity. His team began buying securities backed by high interest mortgages. The bet was that these homeowners would keep paying their mortgages at those high rates and have a hard time refinancing amid the tumult. By 2009, his team had acquired a staggering $14 billion of the government-backed bonds. That year, those investments helped Dixon generate about $467 million in gains, according to an internal presentation.

But the returns proved wildly volatile. The group lost more than $292 million in 2010 and then made $109 million in 2011.

Deutsche Bank pared its holdings to comply with strict new regulations, but by January 2013 was still sitting on about $3 billion of the securities. Top risk officers at the bank told colleagues they were worried about the positions.

Fed Concerns

The trades were enough to draw the attention of the New York Fed, according to a person close to the matter. The Fed, worried about the potential impact on the broader market, summoned Dixon and the bank’s head of North American corporate banking and securities, Jeff Mayer, to discuss the matter. No action was taken. A spokeswoman for the New York Fed declined to comment, as did Mayer, now at Cerberus Capital Management.

Inside Deutsche Bank, the big trade was looking shaky. World bond markets were turning skittish in 2013 as the Fed hinted that it might start to taper its extraordinary efforts to ignite growth. Investors were also worrying that new government policies might make it easier for homeowners to refinance the high-rate mortgages behind the investments.

Disagreements broke out over how to value the bonds. Such valuations are part art, part science: estimates can, and often do, vary. One point of contention was whether the bank should value the bonds as if they were held to maturity, or if it should instead assign valuations based on prices the bonds would fetch if they were sold immediately.

Large Positions

Dixon argued against using fire-sale prices, people familiar with the matter say. Other market players knew Deutsche Bank was holding large positions and would invariably try to turn a quick sale to their advantage by low-balling the prices. In the end, the question was left to Dixon’s supervisors.

Tensions on the trading floor were soon strained to the breaking point. That June, Dixon told the bank he was ready to leave. He was asked to stay to help wind down the trades. By the time he left that October, Deutsche Bank was still holding about $2 billion of the bonds.

With Dixon gone, and Deutsche Bank selling assets worldwide to comply with tightening capital rules, the bank largely exited the position. In 2013, Dixon’s once high-flying trading group, which traded what are known as government-backed pass-through mortgage bonds, lost $541 million, despite hedges designed to cushion the blow, according to internal documents.

Three years on, Deutsche Bank is being asked to account for what happened. The whistle-blower claims the bank masked the losses and should have reported them sooner, people close to the matter say.

Dixon, meantime, is making money on the same kinds of bonds that he was trading at Deutsche Bank, fueling his returns at Hollis Park.

+++ P.O. (FT) Deutsche Bank IT glitch leaves customers without cash

P.O.

As I wrote many times, Deutsche Bank has many very important problems.

But the most important one, in my opinion, is credibility, public trust.

This latest one being of a computer glitch that prevented customers from withdrawing money from their accounts.

After so many errors,wrong procedures, scandals, fines, glitches, and anything one can possibly imagine, people tell me that public trust in the bank is fading, diminishing, and diminishing fast.

And the question is…

Until when…?

Please see my numerous Personal opinions on Deutsche Bank: Deutsche Bank P.O.

It doesn’t look pretty.

Francisco (Abouaf) de Curiel Marques Pereira

(FT) Some Deutsche Bank customers in Germany were unable to withdraw money on Friday after a technical glitch led to some transactions being booked twice.

The German bank said on Friday evening that normal service should be restored by 8am on Saturday morning at the latest, and that many clients could already use their accounts normally. Branches at the bank will stay open longer on Friday evening to help customers who have been affected.

Deutsche did not say how many people had been affected, but a person briefed on the problems said they were a Germany-wide phenomenon.

By mid afternoon, Deutsche’s service account on Twitter had flooded with messages from frustrated customers, who complained about incorrect account statements and being unable to access cash.

“My account is now more overdrawn than should be possible. Cash machines aren’t giving out any money. Will this cost fees?” asked one user.

The glitch is the latest incident in which a big bank has fallen victim to high-profile technical problems. In 2012, Britain’s Royal Bank of Scotland was hit by an IT meltdown in 2012 which left millions of customers without access to their accounts. It was subsequentlyfined £56m for the episode.

The problems at Deutsche began when some transactions from June 1 were booked twice — or in some cases not booked at all. In cases where transactions were booked twice, some customers then found themselves unable to use cash points, as Deutsche’s systems did not believe they had enough money to withdraw.

However, no transactions were actually carried out twice, meaning that no one lost money, according to the person briefed on the glitch.

Deutsche said in its statement that all balances in clients’ online accounts and at cash points would be correct by Saturday morning.

Deutsche is in the process over overhauling its IT-systems which John Cryan, the bank’s chief executive, has previously described as a “Horlicks”, or total mess.ty

+++ P.O./V.V.I. (BBG) Deutsche Bank Ratings Cut by Moody’s on Struggle to Overhaul

V.V.I.

P.O.  

In Bloomberg:

“That left the grade two levels above junk”

And as per my various Personal Opinions on Deutsche Bank

+++ M.P.O. (BBG) Deutsche Bank May Punish Employees for Personal Trade With Firm

+++ P.O. (BBG) Deutsche Bank Faces Fresh Investor Ire a Year After Shakeup:

«P.O.

…No…No… You are not telling me Francisco that “Deutsche Bank Faces Fresh Investor Ire”…

Please see my numerous P.O. on Deutsche Bank:

+++ P.O. (BBG) Deutsche Bank Struggles to Shake Winter Blues in Credit Markets

+++ P.O. (FT) Deutsche Bank chairman denies pressure to step down

+++ P.O. (BBG) Deutsche Bank, UBS Must Pay for Avoiding Bonus Taxes, Judges Say

+++ P.O./V.I. (BBG) Deutsche Bank Says It Can Pay Debts in Sign Jitters Mounting

+++P.O./V.I. (FT) Charges to drive Deutsche Bank to €6.7bn loss

+++ P.O. (BBG) Deutsche Bank Tally of Suspect Russia Trades Said at $10 Billion

+++ P.O. V.I. (BBG) Germany Opposes Shared Risk in Deposit Insurance, Ministry Says

+++ P.O./V.I. (FT) Deutsche Bank created complex tax avoidance strategies

P.O. (FT) Deutsche Bank is still stuck in the middle of global finance 

++++ M.P.O. (BBG) UniCredit Plans to Shrink Workforce by About 18, 200 by 2018

P.O. (BBG) Deutsche Bank Said Planning 1,000 London Job Cuts: Sunday Times

+++ P.O./V.I. (BBG) Deutsche Bank Says It Can Pay Debts in Sign Jitters Mounting

+++ O.P. (JN) Acções do Deutsche Bank descem após ameaça de corte de “rating”

It’s all in there.

And I have been saying it for years.»

I quote the Bloomberg article:

«Deutsche Bank AG had its credit rating cut by Moody’s Investors Service, which said the German lender faces mounting challenges in carrying out its turnaround.

The bank’s senior unsecured debt rating was lowered to Baa2 from Baa1, Moody’s said Monday in a statement. That left the grade two levels above junk. The firm’s long-term deposit rating fell to A3 from A2.

“Deutsche Bank’s performance over the last several quarters has been weak, and substantial operating headwinds, including continuing low interest rates and macroeconomic uncertainty, will challenge the firm,” Moody’s said in the statement.

Chief Executive Officer John Cryan’s planned overhaul of the bank, laid out in October, ran into an industrywide slump in trading and investment banking, as well as a continued decline in interest rates in Europe and Asia, which is squeezing margins. Net income fell 61 percent in the first quarter, leaving the company at risk of a second straight annual loss this year as it tries to resolve legal cases.

Deutsche Bank fell 1.9 percent to 14.87 euros as of 9:22 a.m. in Frankfurt, extending its decline to 34 percent this year. That’s more than the 21 percent decline of the 39-member Bloomberg Europe 500 Banks and Financial Services Index.

Getting ‘Tougher’

Results so far and the challenges ahead, including a chance of further slumps in consumer and market-linked businesses, will probably force Deutsche Bank to balance restructuring costs with the need to amass capital for stiffened regulatory requirements, Moody’s wrote.

“The plan they’re trying to execute is a good plan for the bondholder in the long run, but they face some pretty challenging headwinds when you look at the current operating environment,” Peter Nerby, a senior vice president at Moody’s, said in a phone interview. “They’re working on it, but it’s tougher than it was.”

Moody’s had said in March that it was reviewing Deutsche Bank. The company’s rating is now stable because of long-term benefits to creditors if it’s able to achieve restructuring goals, Moody’s said.

“All key ratings remain investment grade,” Deutsche Bank Chief Financial Officer Marcus Schenck said in a separate statement on Monday. “And they remain in ‘A’ territory in our counterparty risk assessment and long-term deposit rating, which are most important for our clients.”

The CFO told analysts on a conference call this month that while the “challenging operating environment” has complicated parts of the overhaul, management is “focused on doing the heavy lifting for Deutsche Bank, particularly in 2016.”

The ratings firm also cut grades for Deutsche Bank Trust Corp., a U.S.-based unit that handles correspondence banking, U.S. dollar clearing and wealth management. That business’s long-term issuer rating was lowered one level to Baa2.»

Got it ?

Francisco (Abouaf) de Curiel Marques Pereira

(BBG) Deutsche Bank AG Chief Executive Officer John Cryan said his bank has never had more capital and could easily repay its debt many times over, responding to a credit-rating cut by Moody’s Investors Service.

The ratings company on Monday said the German lender faces mounting challenges in carrying out its turnaround, and cut the bank’s senior unsecured debt metric one level to Baa2, two grades above junk. The firm’s long-term deposit rating fell to A3 from A2.

John Cryan
John Cryan
Photographer: Martin Leissl/Bloomberg

“We are very disappointed,” Cryan said in an interview on the sidelines of the Institute of International Finance’s conference in Madrid. “We have enough capital to repay all of our debt four-times over.”

Cryan’s planned overhaul of the bank, laid out in October, ran into an industrywide slump in trading and investment banking, as well as a continued decline in interest rates in Europe and Asia, which is squeezing margins. Net income fell 61 percent in the first quarter, leaving the company at risk of a second straight annual loss this year as it tries to resolve legal cases.

“Deutsche Bank’s performance over the last several quarters has been weak, and substantial operating headwinds, including continuing low interest rates and macroeconomic uncertainty, will challenge the firm,” Moody’s said in the statement.

Deutsche Bank climbed 1 percent to 15.32 euros as of 10:22 a.m. in Frankfurt, reversing an earlier decline of as much as 1.9 percent. The lender’s shares are down 32 percent this year, more than the 20 percent decline of the 39-member Bloomberg Europe 500 Banks and Financial Services Index.

Getting ‘Tougher’

Results so far and the challenges ahead, including a chance of further slumps in consumer and market-linked businesses, will probably force Deutsche Bank to balance restructuring costs with the need to amass capital for stiffened regulatory requirements, Moody’s wrote.

“The plan they’re trying to execute is a good plan for the bondholder in the long run, but they face some pretty challenging headwinds when you look at the current operating environment,” Peter Nerby, a senior vice president at Moody’s, said in a phone interview. “They’re working on it, but it’s tougher than it was.”

Moody’s had said in March that it was reviewing Deutsche Bank. The company’s rating is now stable because of long-term benefits to creditors if it’s able to achieve restructuring goals, Moody’s said.

‘Heavy Lifting’

“All key ratings remain investment grade,” Deutsche Bank Chief Financial Officer Marcus Schenck said in a separate statement on Monday. “And they remain in ‘A’ territory in our counterparty risk assessment and long-term deposit rating, which are most important for our clients.”

The CFO told analysts on a conference call this month that while the “challenging operating environment” has complicated parts of the overhaul, management is “focused on doing the heavy lifting for Deutsche Bank, particularly in 2016.”

The ratings firm also cut grades for Deutsche Bank Trust Corp., a U.S.-based unit that handles correspondence banking, U.S. dollar clearing and wealth management. That business’s long-term issuer rating was lowered one level to Baa2.

+++ M.P.O. (BBG) Deutsche Bank May Punish Employees for Personal Trade With Firm

M.P.O.

…Deutsche Bank again…

…Are they ever going to get their act together …?

…Considering their track record and by the looks of it, the odds are that no.

…They are not going to get their act together any time soon.

…This pattern of “undesirable” behaviour seems to have taken control of that Bank, from bottom, to all the way high up there, including the Management which was heavily criticized yesterday at the Shareholders Annual Meeting.

…And also yesterday “shareholders voted down its new remuneration plan for top managers.” (FT)

   “In a non-binding vote at Deutsche’s annual meeting in Frankfurt, 51.9 per cent of shareholders voted against the scheme, with 48.1 per cent in favour.” (FT)

  Continuing with the FT…

«In view of the current situation of Deutsche Bank, and the significant increase in fixed salaries in recent years, we reject the new pay scheme for the management board.”

ISS, the influential shareholder adviser, had recommended that investors reject the pay plan.

All other motions at the meeting were passed. A shareholder proposal for a special audit of whether top staff at Deutsche breached their obligations in how they dealt with some of the bank’s legal entanglements was narrowly rejected, with 46.4 per cent of shareholders voting in favour, but 53.6 per cent voting against.

The proposal requested an investigation into whether Deutsche had to pay heavier fines because members of its management or supervisory board had failed to co-operate sufficiently with authorities.

Britain’s Financial Conduct Authority said last year that it had increased the penalty it levied on Deutsche for its involvement in the Libor scandal by £100.8m for insufficient co-operation during the investigation.

Deutsche’s supervisory board and its chairman, Paul Achleitner, have come in for harsh criticism from investors in recent months for waiting too long to overhaul the top management, as well as for allowing a boardroom dispute over how to deal with past problems to spill into the public domain.

This public wrangling unsettled shareholders, and drew further criticism on Thursday. Ingo Speich, a portfolio manager at Union Investment, one of Deutsche Bank’s top 20 investors, described the spat as a “scandal”.

Mr Achleitner, who has chaired Deutsche since 2012, said he “regretted” the public dispute and also acknowledged that there had been questions over his leadership.

However, the Austrian banker said he was “sticking to my duty and my responsibilities”. He added that he would have stood for re-election had the chairmanship been put to the vote at this year’s annual meeting.»

…Are you getting the picture…?

…I certainly am, and have come to my opinion on Deutsche Bank a long time ago.

…”That’s All Folks.”

Francisco (Abouaf) de Curiel Marques Pereira

Link to FT article Deutsche Bank investors vote against executive pay packages

(BBG) Deutsche Bank AG halted bonus payments to a group of employees while examining whether they improperly traded with the firm.

“We are reviewing a transaction that may have involved unacceptable conflicts of interest,” the Frankfurt-based company said in an e-mailed statement, without identifying past or present staff involved. “We will take disciplinary measures where appropriate and review further our controls to minimize the chance of a re-occurrence.”

The internal review focuses on Deutsche Bank’s efforts in 2009 to profit from differences in prices of credit indexes and the underlying debts that compose them, according to a person with knowledge of the situation. Six employees participated in their personal accounts alongside an external hedge fund, the person said, asking not to be identified because the review is confidential. The bank began scrutinizing the trading last year after it was flagged amid a broad push to reduce leverage, the person said.

Deutsche Bank Chief Executive Officer John Cryan, who succeeded Anshu Jain in July, is seeking to restore confidence in the bank’s management and staff conduct after legal bills cost the lender $9 billion since the financial crisis. Unresolved probes and claims have compounded investor concerns that the lender will be forced to sell stock should further fines erode capital.

“For the last three or four years, on a regular basis, there’s been misbehavior at Deutsche Bank,” said Dieter Hein, an analyst at Fairesearch-Alphavalue. “Deutsche Bank obviously needs a cultural change to fulfill their focus, to stop misbehavior and all these litigation charges that have burdened the bank over the past few years.”

Employee Profit

Internal auditors estimate the current and former employees made about $37 million on the transactions, the Wall Street Journal wrote in a report late Thursday. Colin Fan, co-head of the investment banking and trading unit when he left last year, may stand to reap $9 million on a roughly $1 million investment, according to the newspaper.

A spokesman for Fan said he had “fulfilled all appropriate compliance procedures, been entirely transparent at all times and denied any wrongdoing.”

Fan didn’t return calls and a message left on his mobile phone by Bloomberg.

Auditors haven’t determined whether Deutsche Bank lost money once related transactions are considered, the Journal cited an unidentified person briefed on the matter as saying. But excluding such ancillary revenue, a preliminary assessment shows the deal may have cost the firm more than $60 million, the publication said.

To tap outside capital, the transaction featured a special-purpose vehicle that sold senior and junior notes, the person said. Senior notes went to an insurer, which received a fixed return for taking on credit risk. Junior notes went to a hedge fund and the Deutsche Bank workers, the person said. The junior group got a fixed return, as well as the opportunity to benefit from various fees and trading in price differences in the credit market, the person said.

The bank’s investigation also examines the original rationale and approval process for the transaction, as well as how the deal was supervised, the person said.

A senior Deutsche Bank official in 2009 had granted permission for the trading, contingent on the bank marketing the offering to clients and earning a fair share of profits, the Journal said. People close to the matter disagreed over whether outside clients showed interest, it said. The bank has notified European and U.S. regulators, according to the newspaper.

Bafin is aware of the audit and the European Central Bank, the chief supervisor for region’s banks, could also review the matter, according to a person familiar with the case.

“Based on our findings to date, we believe that no client was disadvantaged by this transaction,” Deutsche Bank said in a statement. “In accordance with our usual practice, we have suspended the payment of variable and deferred compensation to certain individuals pending the outcome of our ongoing review.”