The first crack? Deutsche Bank reports heavy losses
Duncan Richardson, News Editor
8 Oct 2015, 11:26 a.m.
Deutsche Banks has warned they are set to post a third quarter loss of £4.4 billion, its largest quarterly loss in 10 years. Germany’s largest financial institution blamed higher capital requirements in relation to their investment bank and a downgrade in the value of its Postal bank. The company’s dividend is expected to be cut.
The bank is also putting aside £860 million to cover fines relating to their involvement in the libor scandal. The bank is also wrapped up in a potential precious metals manipulation investigation which is set to report its findings in 2016. Following the announcement the company’s share price fell around 6%.
Chief executive, John Cryan, is planning to cut the workforce by 23,000 in the hope they do not have to tap shareholders for additional funding. Deutsche Bank has a derivatives book worth $75 trillion which is 50% higher than Lehman Brothers prior to their bankruptcy and 20 times the size the German economy.