Evergreen Capital Management LLC Takes Position in Deutsche Bank AG (DB)

Alicia Cross
June 3, 2018

Germany's troubled lender Deutsche Bank suffered more bad news Friday with a Standard and Poor's downgrade, despite its efforts to emerge from years of crisis with a new CEO and dramatic cost cuts.

"We appreciate S&P's statement that 'management is taking tough actions to cut the cost base and refocus the business in order to address the bank's now weak profitability", the German lender said.

Deutsche's newly appointed chief executive Christian Sewing has tried to reassure investors that the bank is ready to do what it takes to return to profitability after years of losses.

Meanwhile in Australia, federal prosecutors were preparing criminal cartel charges against Deutsche, as well as the country's third-largest bank and Citigroup, over a $2.3 billion share issue. Zacks Investment Research upgraded shares of Deutsche Bank from a "strong sell" rating to a "buy" rating and set a $16.00 target price on the stock in a research report on Wednesday, April 18th.

A source familiar with the thinking of the European Central Bank (ECB), which regulates Deutsche Bank, and its top shareholder HNA Group Co.

Aside from staff, Deutsche Bank is also looking to cut costs by moving offices "out of city centres" and paying less money to information technology vendors, according to Mr Sewing's presentation.

The Fed's assessment has not previously been made public, it said, sending shares in the German lender down 7.2 percent to 9.16 euros, their lowest level in more than a year and a half. DB is hitting $11.08 during the last trading session, after decreased 4.24%.Deutsche Bank Aktiengesellschaft has 31.99 million shares volume, 545.81% up from normal.

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Deutsche Bank said it doesn't comment on specific regulatory feedback, adding, "We are highly focused on addressing identified weakness in our USA operations".

"As you know, we have made progress in remediating them over the past year", he wrote.

But he admitted that the newsflow was "not good".

"The bank has failed to sufficiently restructure the business to operate in a low interest rate and regulatory constrained environment", he said. "We're not yet where we want to be, but we are steadily getting there".

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

The label has forced Deutsche to get the Fed's approval for decisions including hiring and firing senior managers, reassigning job duties and making severance payments, the Journal reported.

"There are no concerns with regard to the financial stability of Deutsche Bank AG", it said.

Other reports by Free-Prsite

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