Deutsche Bank Share Price Hits Historic Low
Samuel Gee, News Editor
26 Sep 2016, 3:08 p.m.
Deutsche Bank AG’s share price has plunged 6% this morning on the news that German Chancellor Angela Merkel dismissed the possibilities of state intervention to help the struggling bank. The German bank’s share price continues to fall towards zero as its dire health becomes increasingly obvious. In contrast, the gold bull run has continued, with the precious metal up by 2.65% (£+26.18/ oz t) in the last week.
Since 2007, Deutsche Bank’s share price has lost over 90% and almost 50% this year. Its recent refusal to pay a $14 billion fine to the US Department of Justice has raised concerns about cash-flow, highlighting the German lender’s troubling income shortage.
Despite CEO John Cryan’s claims to the contrary, it seems as though the bank are in serious trouble and with derivative holdings of a reported $75 trillion, it has been labelled the most dangerous bank in the world. Comparisons have been made between the German bank and Lehmann Brothers’ position in 2007. Should Deutsche Bank go the same way, the consequences could be even more severe.
Last time such an event occurred the gold price soared to a record high. With precious metal prices moving back towards those levels in recent months, any potential banking crisis could certainly lead to another prolonged bull market for gold.