Deutsche shares down as CEO fails to secure DOJ deal

Deutsche shares down as CEO fails to secure DOJ deal
A statue is seen next to the logo of Germany's Deutsche Bank in Frankfurt, Germany, January 26, 2016. REUTERS/Kai Pfaffenbach/File Photo

Deutsche Bank shares fell more than 3 percent after CEO John Cryan failed to negotiate a deal with the DOJ over the mis-selling of mortgage backed securities. 

  • This week, Cryan is attending the IMF and World Bank's autumn meetings in Washington.
  • German trader: "One had hoped that a quick agreement was possible.”
  • By 0818 GMT: Deutsche Bank shares had dropped 3 percent at 11.74 euros.
  • Terry Torrison, managing director at Monaco-based McLaren Securities: “They had a bit of a bounce up last week, but I would still steer clear of Deutsche Bank.”
  • "They were never going to sort out the U.S. issues that quickly, and whatever happens, I still think they will need to have a rights issue.”

(FRANKFURT, GERMANY) Deutsche Bank shares fell more than 3 percent on Monday after Chief Executive John Cryan failed to secure a speedy deal with the U.S. Department of Justice (DoJ) over the weekend over the mis-selling of mortgage-backed securities.

Cryan was attending the International Monetary Fund and World Bank's autumn meetings in Washington, raising hopes that he might personally negotiate down the $14 billion fine the DoJ has demanded.

"One had hoped that a quick agreement was possible," a German trader said.

By 0818 GMT, Deutsche Bank shares had pared losses but were still at the bottom of a flat German blue-chip index, down 3 percent at 11.74 euros.

"They had a bit of a bounce up last week, but I would still steer clear of Deutsche Bank," said Terry Torrison, managing director at Monaco-based McLaren Securities.

"They were never going to sort out the U.S. issues that quickly, and whatever happens, I still think they will need to have a rights issue."

Deutsche Bank is expected to issue new shares, sell assets, or both, once it knows the scale of the fine, to ensure that its capital ratio remains within regulatory limits. 

It is struggling to restore market confidence, which took a blow when the $14 billion figure was leaked but which was already low as investors questioned whether Cryan had a credible plan to revamp the bank.

This article was contributed by Reuters

Please contact TRUNEWS correspondent Edward Szall with any news tips related to this story.
Email: Edward.Szall@trunews.com | Twitter: @EdwardSzall | Facebook: Ed Szall 
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