the descent of Deutsche Bank continues. In the second quarter, the surplus slumped to just 20 million euros, as the institution announced in Frankfurt on Wednesday. A year ago, it earned even EUR 818 million. It also costs on the conversion were reflected. The Bank also led the major uncertainties in the capital markets, among other things because of the Proposed referendum on United Kingdom membership of the European Union-vote as load factor that the low interest rates hit increasingly by the results. Provision had to increase the Group
The income -. All of the income of the Bank – slumped by 20 percent to 7.4 billion euros. The figures were in line with expectations of analysts. CEO John Cryan announced to consider a tightening of the current austerity program “. Should the current weak economic environment, we must be more ambitious in speed and intensity of our conversion”
The bank has its capital buffer in the second quarter increased only slightly. The hard core capital ratio climbed in the past three months by 0.1 percentage points to 10.8 percent, as the financial institution announced. Originally, the Board announced a significant increase of 0.5 percentage points. However, the completion of the already agreed sale of the stake in the Chinese Hua Xia Bank because still lack official permits delayed. The sale to the bank to bring about three billion euros and increase the capital ratio by 0.4 points. The group now hopes in the second half for the green light for the sale.
The hard core capital ratio is the ratio of equity capital to risk positions. Equity is considered an important support of banks in difficult times. In recent quarters, the rate had fallen sharply in the past year because of the record loss of 6.8 billion euros. Therefore, there is many investors are concerned that the bank must resort to a capital increase again. The CEO wants John Cryan but avoid, especially since the stock price of the bank has dropped this year by 40 percent.
With some tension experts look at the results of the European bank stress tests on Friday night. However, most analysts do not expect such poor performance of the bank that they’ve then need to tap the capital market.
In the long term should the German bank its buffer but in any case strengthen. By early 2019, they must come to a hard core capital ratio of 12.25 percent. She herself has set a value of 12.5 percent to the target. To date, the management wants to achieve this primarily through a stronger retaining profits. Therefore there should be no dividend again for this year. Whether that is enough doubt some experts, given the declining revenues in the daily business of but. Many observers also want larger buffer, so that the bank is prepared for a possible further tightening of capital requirements.
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