Deutsche Bank makes 278 million euros, strengthens buffers
- Author: Darren Santiago Oct 27, 2016,
Oct 27, 2016, 15:20
Thursday's "surprisingly positive" release "catches all those who saw the winding-down of Deutsche Bank as a sure thing flat-footed", said analyst Ingo Frommen of LBBW bank.
Deutsche Bank shares rose 3.6 percent in pre-market trading at brokerage Lang & Schwarz, while Germany's blue-chip index was seen down 0.4 percent.
"The bank is working hard on achieving a resolution of this issue as soon as possible", Cryan said.
While a sell-off in the shares accelerated last month when the U.S. Justice Department asked $14 billion to settle a probe tied to residential mortgage-backed securities, Cryan said he doesn't plan to raise capital and expects U.S. authorities to scale back their initial demand.
The news comes after British CEO John Cryan today warned of rapid restructuring as the bank posted a two per cent profit amid its weakening position. Some clients curtailed their business with Deutsche Bank over the course of several weeks, including by pulling deposits, executives said Thursday. This means paying the bonus in parts through the year in the form of stocks.
Some analysts have also said that while the bank may be able to save costs by scrapping bonuses, it might dampen employee morale and lead to staff moving out of the bank.
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The bank is committed to serving its governmental, corporate and institutional clients in Mexico from global hubs and will continue to offer these clients the full range of investment banking products.
The Wall Street Journal reported September 15 that the Justice Department initially proposed the bank pay $14 billion to close out mortgage-securities investigations.
During the third quarter, the bank strengthened its common equity tier 1 capital ratio, a measure of financial resilience, to 11.1 percent from 10.8 percent in the quarter before - still below the year-ago figure of 11.5 percent.
Deutsche Bank has reported an unexpected net profit of €278 million in the third quarter as it benefited from a surge in bond trading that has boosted the earnings of all Wall Street banks. Revenues were also a modest improvement to consensus expectations of €7.19BN, coming in at €7.49BN as a result of a 14% jump in fixed income trading revenues.
Figures released on Thursday show Deutsche has a war chest of around 5.9 billion euros in provisions to cover regulatory fines and legal costs, an increase of 400 million since June.