Deutsche Bank misses earnings target once again.
Deutsche Bank AG (DBK), Germany's biggest bank, said first-quarter profit declined 33 percent for the Quarter. Net income fell to 1.38 Billion Euros ($1.82 billion) from 2.06 Billion Euros in the year-earlier period, the Frankfurt- based company said today in a statement. That missed the 1.56 Billion-Euro average estimate of 9 analysts surveyed by Bloomberg.Share Price fell a MASSIVE 50% during the tenure of CEO Josef Ackermann, who once heralded as the bank's "white knight", leaves the organization in a complete state of disaster. Although Deutsche Bank proudly maintains never having to be bailed out by the German Government, they did receive outside help which is coming back to haunt them now.
Deutsche Bank avoided the LTRO, only because they already borrowed from the US FED to the tune of $354 BIL USD, a fact which gets little press.
The European Banking Authority (EBA),told Deutsche Bank last year to close a 3.2 Billion-Euro gap by the end of June 2012, as part of measures designed to bolster confidence in the financial industry. The firm said in February that it met the goal six months early. This begs the question, why they are now desperately seeking to raise 3 Billion-Euros, through a stock sale?
Deutsche Bank's self outing of their MASSIVE legal problems, drove price down recently, and the EBA has kicked back their (DB's) recapitalization plan as it doesn't meet requirements, they are indeed in very deep trouble, hence the news in last week's WSJ, regards the 3 Billion-Euro stock sale to raise capital, but will force shares lower in doing so.
This story dominating European Newscasts this morning will see shares dropping today.
Deutsche Bank is currently leveraged @ 60:1 on a TCE/assets basis, and t its Basel "risk-weighted" assets are only $450 billion, but actual balance sheet assets are $3 Trillion.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.