Deutsche Bank suffers record quarterly loss



FRANKFURT: -- Deutsche Bank has posted a record quarterly loss with a pre-tax figure of 6 billion euros.

It’s another blow to German corporate pride coming on the heels of the Volkswagen emissions scandal.

Chief executive John Cryan, who took over in July promising to cut costs and implement reforms that could involve thousands of job losses, has described the news as “not good”, saying staff bonuses will have to be cut.

“In some ways, this is no surprise. What a new boss does first is to clean up and he has to clean up in order to set new things up. It’s a huge amount, roughly 6.3 billion,” said Ascan Iredi, Chief Investment Officer with Flatex. “Let’s see what he comes up with. I think one thing is connected to the other and the widespread custom of giving out bonuses will have to end, also at Deutsche Bank. Times have indeed changed for everybody.”

Stalled reforms, rising costs, fines and settlements mean Deutsche Bank ranks bottom among world investment banks.

The losses caused shares in Germany’s flagship lender to fall three percent before recovering.

Analysts said markets recognised that the new boss was taking action to tackle long-standing problems – and it seemed unlikely the bank would have to raise capital soon.


-- (c) Copyright Euronews 2015-10-09

"...and it seemed unlikely the bank would have to raise capital soon."

In banker lingo, a bank has to have its own capital as a reserve for losses if nothing else. It lends its depositors money which the depositors have "loaned" to the bank. Enough losses, and the bank of course has to cover the depositors' money first by digging into its own pockets - its capital. If the bank has enough losses it will use up its own capital and have to raise more, usually with a stock issue. It can't "borrow capital" because it has to own the capital outright to be solvent.

When the author says "raise capital" he means the bank is or isn't insolvent. Watch for future quarters to see if the bank has to raise more capital which is a sign it's going upside down and would be insolvent without additional investors.

Cheers.

When I worked for Deutsche Bank, I recall Joseph Ackerman's remarks to shareholders.

He said "Last year we we standing in front of an abyss; this year we have taken a big step forward".

Well, if DB hadn't been involved in financial criminal activity they wouldn't have these fines to write off.

I'm either just plain stupid or just logical, but I think it would be better for the bank and the bank's stakeholders if the PEOPLE who are engineering and approving financial crimes were arrested, tried and sent to prison.

And the steeple continue their sleep. Most of the west now have the laws in place that classify deposits as liabilities for banks. In the case of a TBTF bank going belly up these depositors will have their deposits converted into shares and face hair cuts (like Cyprus). As soon as your deposit is converted to shares, the depositor loses any deposit guarantees a country may have. Coming soon to a bank near you.

......does that make any sense....???

People in the Financial Industry have been predicting the serious demise of DB for sometime.

It's their favorite to fail of all the big EU banks.

Siemens - bribery, VW - fraud, DB - heading to the abyss.

No wonder Merkel wants to create diversions. Have contributed to the awful migrant mess she's now apparently up for a Nobel prize. As Germany goes down the pan, she'll be alright.

People in the Financial Industry have been predicting the serious demise of DB for sometime.

It's their favorite to fail of all the big EU banks.

Siemens - bribery, VW - fraud, DB - heading to the abyss.

No wonder Merkel wants to create diversions. Have contributed to the awful migrant mess she's now apparently up for a Nobel prize. As Germany goes down the pan, she'll be alright.

Makes you wonder who is going to pay for the millions of new arrivals.

So sad, I feel so sorry for the bank. Must be difficult to loose money when you pay 1% interest and charge 10%. </sarcasm>