Wackelt the German bank? The share in the descent, the creditors in a panic: Behind Deutsche Bank is the worst week since the financial crash of 2008. Is the situation really so dramatic? An analysis.
When all was not bad enough, occurred on Friday then also Standard & amp; Poor’s on the scene – and lowered the credit rating of certain bonds issued by Deutsche Bank to “B +”. You should know that “B +” in the language of the rating policemen for a “highly speculative investment” is. Vulgar words: The papers are to junk level, much deeper, it could hardly be more
Is it already time again.? Wobbling banks? Behind the largest German financial institution is unquestionably the worst week since the financial earthquake of 2008. It all started on Monday with the release of the Institute, to be able to use the amounts due during this year interest rates on so-called coco bonds. Actually the announcement as a sedative for the currently highly nervous investors had thought. But the opposite effect entered. A bank which really goes well, it could eventually save such a statement.
Schäuble makes “no worries”
As helped it not that CEO John Cryan said on Tuesday that his bank balance sheets were “rock solid”. And it hurt even that shortly afterwards a quote from Finance Minister Wolfgang Schaeuble was on the news ticker, which he felt “no worries” the biggest money house of the country do. After all, the government says nothing really only in times of emergency to individual banks? The well-known US economist Nassim Nicholas Taleb brought the mood via Twitter to the point: “I’m not worried about the German bank made – to the German finance minister said that one should not have to worry.”
the share falling anyway for weeks, fell downright from. And when the bonds of Deutsche Bank suddenly made the infamous “risk premium.” – A word that actually know normal people only in connection with the collapse of Lehman Brothers and later with the Greek crisis
a day or two it seemed as would break a veritable panic. Until the Bank finally pulled the ripcord and a rather unusual measure announced. She wants namely to repay its own debt to the extent of more than four billion euros prematurely. The message to investors: If you do not believe that we are highly liquid, then we prove it to you precisely.
Horror week no specific reason
What surprises: a concrete reason for the horror week there was not. On the contrary, after countless scandals the German bank acts currently striving to come to rest at last. In the summer of brittle John Cryan, succeeding the dazzling Anshu Jain. Under the British Cryan, the bank will indeed shrink by some floors – for but again received a firm foundation. Cryan stroked the pampered investment bankers along the bonuses. And he entschlackte the balance of supposed assets that were not even hope values in reality. The consequence: the third quarter alone registered the Institute “unusual depreciation” of 7.6 billion euros. One got the impression: The German bank is now indeed naked. But at least it is clean.
market value halved since the beginning
The stock, however, did not stop to fall on, but it falls now faster than ever. Counting the recent horror week, the market value has almost halved since the beginning of alone again. At around 15 euros the share certificates note now. For comparison: In peak times there were times more than 115 euros (!). And even at the height of the financial crisis cost the shares more than they do currently.
For the recent price drop, the German bank can only partly something. Finally, the stock prices of fear went before a slump last world back. In addition, sector-specific issues: the economy suffers, then the banks are particularly affected because they fear the loss of credit. Just the energy companies could prove to be unsound borrowers, the price of oil should not recover soon
Another consequence of economic concerns. The interest rates are likely to remain low for a long time – and thus the credit income the financial industry. In addition, there are also problems that affect specifically the German bank shares. These include the fear of a capital increase and the fact that investors Cryan has cut the dividend for at least two years. Now all this is not really new.
Exaggerated panic?
Much evidence therefore suggests that the panic of recent days was overdone. So the banks are now funded solid than they were the day of the great crisis. An indicator of this is the so-called core capital ratio. You should show whether the buffers are thick enough to be cushioning losses under our own steam. 2009, this characteristic was Europe’s banks on average at 9.0 percent; now there are 12.5 percent. Even the German bank, which lags behind the competition in the capital for years, came last, after all, to 11.1 percent.
For a new crash is also suggested that the extreme “risk premiums” limited at Deutsche Bank in a very specific bond class were – namely the aforementioned “Coco-bonds”. These securities were in the first place designed as a consequence of the financial crisis. Their peculiarity is that the debtor (ie: the German bank) suspends interest payments in bad years; and in the event of difficulties, the bonds lose their value altogether. Critics fear that the papers might put a spiral of escalation as in 2008 in transition
but maybe it’s just the opposite. If a bank does not need the “Cocos” in downturns to use, this contributes to their stabilization. The “B +” – verdict of Standard & amp; Poor’s concerned because actually only the “Coco bonds”. Although this is still a warning sign. But still no alarm signal. All in all, certified S & amp; P Deutsche Bank a credit rating of “BBB +”. Toll is not. But much better than junk status.
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