Caixabank has informed Deutsche Bank’s management team of its interest in the German bank’s Spanish subsidiary in the event of a sale. The approach was made in 2016, before Deutsche Bank reached an agreement with the US Department of Justice to reduce the fine for selling “subprime” mortgages to $7.2 billion
The company is a great business that can raise €8bn to essentially hand over the proceeds to the US courts without destroying its market cap (c.-10% on the news). “Hats off then to Mr Cryan, the CEO of Deutsche Bank, for keeping the benefits of the doubt for more than a year into the job”, says Carax- Alphavalue’s analysts.
Deutsche Bank is still betting on the Spanish property market and has bought €400 million in doubtful property developer loans from Bankia. The deal was carried out by the German bank’s funds, which could have paid around 150 million euros for the assets.
Out of the 33 banks subjected to the Federal Reserve’s stress tests, 31 have passed this year, which means they will be able to increase their dividends and share buybacks. On the other hand, Deutsche Bank and Banco Santander failed the tests due to the Fed’s doubts about their capacity to measure risk.
The European banks are having nothing but trouble in the last few months. And if they needed something else to further cloud their outlook – negative interest rates, meagre margins, increasing capital demands…- doubts have begun to emerge lately over whether the sector can continue to pay the high interest on the so-called CoCos (Contingent Convertible Capital Instruments), contingent convertible bonds.
Ana María Llopis, independent director at Societe Generale explains that “the entity’s share price was at 40 euros before the crisis and now it is around 42-44 euros. So some banks have recovered. Then there are others still at low prices for particular reasons, or because they operate in China or Brazil.”
The Corner | March 12, 2015 | Santander Holding USA and Deutsche Bank Trust Corporation have been singled out by the US Fed over risk management and capital strategies. However, solvency of both entities is not questioned – their current solvency ratio exceeding the minimum asked by the Fed (5.0%).
MADRID | The Corner | European banks have increased their holdings of govies in June by +0.1% m/m (+1.4% y/y), with one somewhat higher increase in the periphery (+ 0.6% m/m and – 1.2% y/y), mostly of a +8.6% in Ireland and +1.8% of Portugal. According to the ECB, EU lenders have reached a new all-time high of 1.8trn debt holdings, while peripheral banks are approaching 2013 numbers (€830bn vs €840bn in June 2013).
MADRID | By Ana Fuentes | If you haven’t watched it, here’s Deutsche Bank’s co-head of corporate banking and securities Colin Fan scolding City traders and trying to convince the world that they’ve done some ménage after the crisis. Remember that the lender paid a €725m penalty to the EU in the Libor scandal; the biggest single fine in a total of €1.7bn charged to six banks.“Being boastful, indiscreet or vulgar is not okay. It will have serious consequences for your career,” Mr Fan warned its staff. Instead of an email, the bank chose the formula of an “internal” video… which went viral just before the German lender started making headlines for its plans of selling €8bn worth of new shares. A plan that is supposed to catapult Deutsche out of the ranks of the worst capitalized banks in Europe -from 9.5 per cent to 11.8 per cent.
LONDON | By Victor Jimenez | In the sector regulators’ agenda, European banks will indeed need more capital to protect the public purse from the fallouts of the risks that entities take on.