S&P Cuts Rating, Questions Strategy of Deutsche Bank

REUTERS  Ralph Orlowski  File

REUTERS Ralph Orlowski File

More notable recent Deutsche Bank Aktiengesellschaft (NYSE:DB) news were published by: Seekingalpha.com which released: "Deutsche Bank: Truly Dreadful" on May 07, 2018, also Seekingalpha.com with their article: "Deutsche Bank on FDIC problem bank list - FT; shares down nearly 5%" published on May 31, 2018, 247Wallst.com published: "International Employee Moral Day as Deutsche Bank Cuts 7000 Jobs" on May 25, 2018.

S&P said that "relative to peers, Deutsche Bank will remain a negative outlier for some time".

Deutsche's newly appointed chief executive Christian Sewing, who unexpectedly replaced John Cryan in early April, last week sought to reassure investors that the bank is ready to do what it takes to return to profitability.

The downgrade by S&P followed reports that the Federal Reserve had labeled the bank's USA business "troubled", news that sent its shares tumbling Thursday to a record low.

In Australia, federal prosecutors are preparing criminal cartel charges against Deutsche, ANZ and Citigroup, over a A$2.3bn (£1.3bn) share issue.

The string of bad news has raised troubling questions about the long-term viability of what has traditionally been seen as the too-big-to-fail bank of Europe's top economy. DZ Bank restated a "buy" rating on shares of Deutsche Bank in a research report on Thursday, May 24th.

Sewing said Deutsche Bank's credit and market risk levels had rarely been so low, speculation it was exposed to political uncertainty in Italy was unfounded, and funding plans for this year were well advanced.

Deutsche's woes stem back largely to its bold attempt to compete with the major Wall Street investment banks in the giddy years leading up to the financial crisis. Its stake in Philip Morris (Put) (NYSE:PM) was reduced by 42,345 shares to 400 shares valued at $12.60M in 2018Q1, according to the filing.

Deutsche Bank was well positioned to react to excessive moves in debt markets, Sewing said, adding that a series of enforcement actions by the U.S. Federal Reserve were principally related to weaknesses in internal controls and infrastructure.

Deutsche Bank declined to comment to CNNMoney about "specific regulatory feedback". We're not yet where we want to be, but we're steadily getting there.

European banking regulators said that Deutsche had made "good progress" in its efforts to address regulatory concerns.

S&P had rated Deutsche's long-term credit at A- on negative credit watch.

The Journal cited sources that said a subsidiary of the bank, Deutsche Bank Trust Company Americas, was given a "problem bank" rating by the Federal Deposit Insurance Corporation, the government body that provides it with insurance.

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