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- German bank market dominated by Deutsche Bank and Commerzbank, both at all time lows.
- European Central Bank about to start asset-backed security purchases.
- German banks about to have their bad debt bought off them.
- Could this be the start of the share price recovery for Deutschebank and Commerzbank?
Deutsche Bank Is A Good Buy If You Believe In Europe
- Deutsche Bank's massive footprint has made managing the bank tough since the Crisis.
- The bank is highly leveraged to capital markets especially in the fixed income arena.
- If Europe starts to recover more strongly the bank could have outstanding upside, if Europe does not recover, downside is limited at current prices.
- Companies like BlackRock and Vanguard will benefit from the current price wars, but it will not prove to be beneficial for Deutsche Bank.
- Due to the impressive figures being recorded by the ETF over the last many quarters, it is expected that it will grow at a tremendous rate in the coming years.
- However, under the given circumstances, it is predicted that exchange traded fund assets for Deutsche Bank will experience a sluggish growth in the next few years.
Buy Deutsche Bank On Cheap Valuation And ECB Action
- Action from the ECB will benefit Deutsche Bank.
- Deutsche Bank trades at a cheap forward P/E of 7.97.
- Deutsche Bank could appreciate around 23% from current levels.
- Deutsche Bank's internal controls and regulatory reporting were found deficient by the NY Fed.
- DB has violated the trust of its regulator and thus, investors should be very wary of its financial reporting.
- We'll discuss implications for shareholders.
- DB is experiencing a secular decline in sales revenue.
- Statistics assume that this is a decent opportunity for the long term.
- Earnings/cash flows are highly volatile, thus forward multiple appears to be unreliable.
- The long-term technical situation is becoming highly favorable.
Former Deutsche Bank Trader Fined $17 Million, Scandal Continues
- The UK’s Financial Conduct Authority recently fined Deutsche Bank trader Christian Bittar $17 million for trying to rig the benchmark interest rate.
- This is the latest in a series of public incidents involving Deutsche Bank, along with very poor Q1 results and market declining performance YTD.
- While some suggest Deutsche Bank is at a turnaround point, we are not yet convinced DB is a buy in 2014.
- Deutsche Bank is one of the world's leading global banks and the German market leader.
- The bank's default probabilities are high relative to peers, and it would take a 33% stock price rise to bring default risk to peer levels.
- Ranked by the credit spread to default probability measure, the bank's bonds trade in the top 45% of the value ranking. Good, but not great.
Avoid Deutsche Bank On Poor Earnings And Regional Instability
- Review of Deutsche Bank's earnings and the impact of regional geopolitical events.
- Major Russian banking and gas stocks have been hit due to recent regional events.
- A wait-and-see approach over the summer is the best approach on Deutsche Bank.
Thu, Jun. 5, 2:51 PM
- “The extent of Deutsche Bank’s (DB -3.2%) financial exposure to these matters could be material, and Deutsche Bank’s reputation may suffer material harm as a result," says the bank in the prospectus related to its capital raise.
- No criminal charges have been filed over currency market manipulation, but more than two dozen traders have been fired across a number of banks. What's more, prosecutors - having wrung a guilty plea and massive fine out of Credit Suisse and about to do the same with BNP Paribas - have now gotten the taste of blood, and may have found they like it.
- Deutsche today raised €8.5B in an equity offering and plans to raise another €6.75B through a rights offering expected to be completed this month.
Thu, Jun. 5, 7:55 AM
- The Stoxx 50 (FEZ) is up 0.8% after being about flat ahead of the ECB rate decision, at which the central bank cut all three of its benchmark rates, including taking the deposit facility rate into negative territory.
- Italy (EWI) with a 1.3% gain and France (EWQ) ahead 1% lead the way.
- The euro (FXE) tumbles about 40 pips, now off 0.3% on the session and buying $1.3563.
- Europe equity ETFs: RSX, VGK, EWG, FEZ, GREK, EWP, EWI, DFE, RUSL, IEV, RSXJ, EWL, ERUS, EWU, RUSS, EPV, EZU, EWD, HEDJ, NORW, EWQ, EPOL, EIRL, PLND, EWO, RBL, GXF, EWN, FEU, EWK, FDD, EWGS, FEP, EDEN, UPV, EWUS, DBGR, PGAL, ADRU, ENOR, GERJ, DXGE, FEEU, FGM, EURL, FKU, EFNL, EUDG, DXPS, FSZ, EURZ, FIEU, RUDR, DBEU, HEWG, DBUK
- Euro ETFs: FXE, EUO, ERO, DRR, EUFX, ULE, URR
- ECB chief Mario Draghi's press conference begins at 8:30 ET.
Thu, Jun. 5, 7:07 AM
- Deutsche Bank (DB) reportedly has priced its €8.5B equity sale at €22.50 per share, higher than the €21-€21.50 price rumored yesterday. Still that price represents a 24% discount to the bank's current share price.
- The stock's lower by 1.3% in premarket action.
- Previously: Deutsche Bank capital raise set for sizable discount
Wed, Jun. 4, 9:09 AM
- "Underperformance has left CS shares with 35% upside potential to our target price, one of the highest in the sector," says analyst Jernej Omahen, upgrading the stock to a Buy and adding the name to Goldman's Conviction List.
- "Our analysis underlines that Credit Suisse's business mix embeds strategic optionality for group ROE expansion that other, non-Swiss, investment banks don’t have." The bank's "reorientation" towards private banking and wealth management could: 1) Improve returns; 2) Improve capital generation; 3) Reduce TBTF risk; 4) Close the valuation gap with UBS, which currently trades at a 51% premium based on 2104 earnings estimates, and a 42% premium based on 2015 price/tangible book value.
- Shares +1.4% premarket
- Goldman also pulls its Sell rating on Deutsche Bank (DB) citing the recent capital raises (the latest one is today) and the bank's new strategic direction.
Wed, Jun. 4, 6:27 AM
- Deutsche Bank (DB) will price its €8B ($11B) capital hike today at between €21 and €21.50 per share, reports CNBC, a sizable discount to the current price above €29. Nevertheless, the stock is higher by 0.8% in Frankfurt action as the discount was likely expected and priced in.
- The bank is tapping shareholders for €6.3B of the new equity and is getting another €1.75B from Paramount Holdings Services, an investment vehicle controlled by the Qatari royal family.
Mon, Jun. 2, 12:47 PM
- "It's all about costs," says a senior Deutsche Bank (DB -0.7%) official close to the bank's plans for investment banking. "We're not counting on any kind of uptick" from revenues.
- Is the statement at odds with Deutsche's pitch to investors (amid a planned $11B equity raise) billing itself as the last many standing in European investment banking - and ready to rake in business - as rivals like Barclays and UBS scale back their operations?
- As for cost cuts, the record of management is a good one, with €2.3B in reductions since co-CEOs Anshu Jain and Juergen Fitschen took over a couple of years ago. But another €3.3B is needed by year-end 2015 to meet a 12% ROE goal, and Morgan Stanley isn't so sure it will be met, seeing ROE of just 8% by 2016.
Thu, May. 22, 11:22 AM
Thu, May. 22, 8:58 AM
- "Deutsche Bank (DB) has become a big legal department with a banking subsidiary," says one frustrated shareholder at the company's annual meeting.
- On management's vow to be one of the winners in the banking world, the same shareholder - a representative of a larger owner group - notes Deutsche is losing ground to rivals and has performed worse than also legally tied up JPMorgan.
- Are there any banking scandals that Deutsche Bank is not involved in, asks another shareholder.
Mon, May. 19, 2:06 PM
- Raymond James upgrades E Trade Financial (ETFC +0.1%) to Outperform and set $24PT.
- Baird cuts its rating on American Realty Capital Properties (ARCP -1.2%) from Outperform to Neutral and set $15PT.
- Bank of America downgrades Deutsche Bank (DB -1.6%) to Underperform.
- Credit Suisse downgrades Fulton Financial (FULT +2.8%) to $14 Market Perform and set $14PT.
- Genworth Financial is downgraded by Morgan Stanley (GNW -0.5%) to Underweight and set $18PT.
Sun, May. 18, 9:34 PM
- "We are launching a package of measures designed to reinforce Deutsche Bank's (DB) aspiration to be the leading client-centric global universal bank," say co-CEOs Jurgen Fitschen and Anshu Jain of the bank's plan to sell €8B ($11B) of new shares to boost its capital ratios.
- Of the 360M new shares to be issued, the Qatari royal family has agreed to buy 60M, and the remaining amount will be sold to existing owners via a rights-offering. Insiders expect the bank will have to offer the stock at about a 25% discount to the current price, and the sale is expected to boost Deutsche's Tier 1 capital level to 11.8% vs. the current 9.5%.
- The equity raise isn't a huge surprise, and DB has been in the penalty box for months as investors discounted the share issuance.
Fri, May. 16, 7:29 AM
- "Being boastful, indiscreet and vulgar is not OK. It will have serious consequences for your career. And, I have lost patience on this issue.” So says Colin Fan, the co-head of Deutsche Bank's (DB) investment bank in a video to the lender's traders.
- The stern warning comes as the trading desks of banks worldwide face increasing legal and regulatory oversight. “You may not realize it, but right now, because of regulatory scrutiny, all your communications may be reviewed ... This includes your emails, your conversations and your conduct.”
- “Communications that run even a small risk of being seen as unprofessional stops right now."
Thu, May. 15, 11:08 AM
- Deutsche Bank (DB -1.3%) closes the book on a painful episode, agreeing to sell Cosmopolitan in Las Vegas to Blackstone (BX -2.5%) for $1.73B in cash. The bank became the proud owner of the resort in 2008 after foreclosing on developer Bruce Eichner, and has tried to make a go of it ever since (all the while having a For Sale sign up). It's never turned a profit and Deutsche's investment in the property sums to $4B.
- For Blackstone, the deal represents its first big gaming investment.
Sun, May. 11, 5:13 AM| Comment!
Thu, May. 8, 12:30 PM
- Jefferies upgrades AmREIT (AMRE +1.5%) to Buy, and sets a $19 PT.
- First Financial Bankshares (FFIN +0.6%) is upgraded by Macquarie to Neutral.
- PennyMac Financial Services (PFSI +5.8%) is upgraded to Buy at Compass Point with $18.50 PT after Q1 results yesterday.
- Raymond James ups Main Street Capital (MAIN +0.3%) to Outperform with $34PT ahead of its quarterly earnings.
- CommonWealth REIT (CWH +1.2%) is downgraded to Sell by Stifel Nicolaus. Earlier: CommonWealth REIT beats by $0.01, beats on revenue
- UBS downgrades Deusteche Bank (DB +1.4%) to Neutral.
- Provident Financial Holdings (PROV -0.1%) is downgraded to Underperform by Raymond James.
- Evercore Partners downgrades Zion Bancorp (ZION +1.4%) to Equal Weight with $28 PT.
- Fidelity & Guaranty Life (FGL +0.3%) is cut to Neutral at Credit Suisse
Mon, May. 5, 10:20 AM
- A check of the global banks finds the group pacing market declines in morning action after Friday night's warning on Q2 trading revenue from JPMorgan (JPM -2.2%).
- Nomura's Steven Chubak is first out with lower JPMorgan earnings estimates.
- Jim Cramer sums up sentiment: "This has been a house of pain. You can't own these right now. You just can't."
- Morgan Stanley (MS -1.9%), Goldman Sachs (GS -1.5%), Citigroup (C -1.2%), and Bank of America (BAC -1%), Deutsche Bank (DB -1.2%). Far less trading dependent than the other Too Big Too Fails is Wells Fargo (WFC -0.2%).
- The iShares DJ U.S. Broker-Dealer ETF (IAI -1.2%)
- XLF -0.7%, KBE -0.8%
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, PFI, FXO, FNCL, KBWB, FINU, KCE, RWW, RYF, PSCF, FINZ, KBWC
Fri, May. 2, 5:02 AM
- President Obama is due to meet German Chancellor Angela Merkel today, when the Ukraine crisis is set to be high on the agenda.
- The U.S. wants to be able to widen the sanctions against Russia - which have so far been limited - to the broader economy if the situation continues to escalate. However, Merkel is under pressure from major German companies such as Siemens (SI), Deutsche Bank (DB) and Volkswagen for no further action.
- Meanwhile, Ukrainian forces have launched an attack to retake the eastern city of Slaviansk from pro-Russian separatists, who have shot down at least one helicopter gunship, killing the pilot. Ukraine officials indicated that the use of anti-aircraft missiles shows that Russia is behind the ferment.
- The IMF has warned that should Ukraine lose territory in the east, the fund would probably have to add to the country's $17B international bailout.
- Russia's Micex index is +0.1% and the USD-RUB is +0.6% at 35.814 rubles.
- More on Ukraine
- ETFs: RSX, RUSL, ERUS, RUSS, RSXJ, RBL, GUR, ESR, RUDR
DB vs. ETF Alternatives
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