Deutsche Bank Plunges To 16-Month Lows, Bank Credit Risk Spikes

Deutsche Bank shares are down 6%, at their lowest since Nov 2016 (near post-crisis lows), after warning that euro strength and higher funding costs will weigh on revenue in the securities unit this quarter (just a week after the lender voiced optimism about the outlook for the year).

Bloomberg reports that the company’s corporate and investment bank unit faces a 300 million-euro ($368 million) headwind from the currency effect and 150 million euros from higher funding costs, Chief Financial Officer James von Moltkesaid at an investor conference in London on Wednesday.

The reaction was a swift 5% plunge in the stock...

Heading back towards 2016 post-crisis lows...

Marcus Schenck, co-head of the corporate and investment bank, said at a separate event in London Wednesday that the lender still has some work to do convincing its shareholders it’s turnaround is on track.

“John has always made it very clear. Look, this is not a one-quarter journey. This is a several-year journey,” Schenck said. “We think we’re on the right path with that journey. But we definitely are a show-me case.”

We suggest "some work" is perhaps an understatement.

However, it's not just Deutsche that has been showing signs of strain recently in the credit markets... Many of the major prime brokers are seeing CDS breaking out...

 

And more ominously, US financial credit risk is flashing red while bank stocks shrug it off (for now)...

This will not end well.

Comments

slopz38 Watson Wed, 03/21/2018 - 11:12 Permalink

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In reply to by Watson

ZeroSpam slopz38 Wed, 03/21/2018 - 11:18 Permalink

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>>>>   Slopz38 posted this identical spam post   **75 times** in one day, March 20!!!

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ALL THIS SPAM IS FROM THE SAME SPAMMER!
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In reply to by slopz38

silverer Wed, 03/21/2018 - 09:02 Permalink

Jim Willie would tell you they must be experiencing a dip in the drug business. That's where billions of their banking dollars come from.

LawsofPhysics Wed, 03/21/2018 - 09:03 Permalink

LOL! Douche bank, like all banks, is in fact insolvent.

Hundreds of trillions in paper/digital claims are just beginning to seek out real assets.

Hedge accordingly.

Ink Pusher Wed, 03/21/2018 - 09:21 Permalink

By my numbers 88% of all central banks are over-exposed,

54% of which are EXTREMELY VULNERABLE.

26% have made my SHORT THEM INTO OBLIVION  list.

Libor is so full of shit ,it should be turned into a pig farm.

 

Herdee Wed, 03/21/2018 - 09:46 Permalink

Derivatives trading on derivatives. What could possibly go wrong with a gigantic risk position like that? Maybe the New York Fed's Trading desk can hold it together a little longer? They're pretty good at manipulating everything else. Central planning algos gone wild.