Dec. 8, 2014, 10:28 AM
- A combination of new regulations and near-zero interest rates has some banks - including JPMorgan (NYSE:JPM), Citigroup (NYSE:C), HSBC, Deutsche Bank (NYSE:DB), and Bank of America (NYSE:BAC) - privately telling larger clients to take their deposits elsewhere or face fees on accounts which have long been free.
- “Ultimately my balances aren’t as profitable for the banks, and that’s going to impact my business,” says an executive with a title insurance company, complaining of sleepless nights amid negotiations with his bankers.
- BNY Mellon (NYSE:BK) has begun charging institutional clients money to park money in euros, and State Street (NYSE:STT) says itwill soon begin doing so.
- Some bankers are advising large clients to break up large deposits across a number of lenders (including smaller banks not subject to the new regulations), and other corporations are going to find themselves needing to build more sophisticated (and riskier) portfolios likely including vehicles like short-term bond funds and uninsured money-market funds.
Dec. 5, 2014, 3:35 AM
- "Deutsche Bank (NYSE:DB) is probably the last truly global institution in Europe," supervisory board chairman Paul Achleitner says, "which makes the intensity of what we have to work off a little larger than many of our competitors."
- DB's aim is "to be respected again, everywhere."
- Shares +1.8% on Euronext.
- Source: Bilanz
Nov. 17, 2014, 12:17 PM
- The market for trading swaps protecting against the default of individual companies was once a vast and highly profitable one for banks, but is far less so today, weighed down by new regulatory scrutiny both here and in Europe.
- “Deutsche Bank (NYSE:DB) is redeploying resources and capital into credit cash trading,” says a spokeswoman.
Nov. 12, 2014, 2:49 PM
- Deutshce Bank (NYSE:DB) is near a sale of most of a $2B portfolio of U.S. commercial real estate loans to TPG, reports the WSJ, with the upswing in the property sector making it possible for the bank to post a profit on the sale.
- Assets to be sold include mortgages on shopping malls and office buildings originated by Deutsche, along with outstanding paper that the bank purchased on the market. The sale comes as Deutsche - like other large banks - looks to shed assets amid increasingly tough capital rules.
Oct. 31, 2014, 10:38 AM
- Royal Bank of Scotland (RBS +4.8%) is the latest to do so, today announcing the setting aside of $640M for potential settlements in the currency-rigging investigations.
- In total, seven major U.S. and European banks have boosted their legal reserves by $6.5B in October. Last night, Citigroup (C +0.4%) was forced to cut its Q3 earnings by $600M amid "rapidly-evolving" probes.
- UBS has put aside the most of any single bank this month - $1.9B. Next in line is Deutsche Bank (DB +0.7%) with $1.1B, and JPMorgan (JPM +1.3%) with $1B. None of the lenders disclosed exactly how much was specifically for foreign exchange, and none have yet been formally accused of wrongdoing.
- Barclays (BCS +5.6%) reserved $800M for FX-related settlements, and Credit Suisse (CS +0.5%) $400M.
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, FNCL, FINU, RWW, RYF, FINZ
Oct. 29, 2014, 6:22 AM
Oct. 29, 2014, 3:57 AM
- Deutsche Bank (NYSE:DB) swung to a net loss in the third quarter, as heavy legal fees outweighed a rise in investment banking.
- Germany’s top lender reported a net loss of €92M ($117M), on net revenues of €7.9B.
- Spending €894M on litigation costs during the quarter, Deutsche Bank has now spent around €7B on fines and settlements since 2012.
Oct. 28, 2014, 1:50 PM
- Deutsche Bank (DB +2.7%) is replacing CFO Stefan Krause with Goldman partner Marcus Schenk, the WSJ and Bloomberg report.
- Krause has been Deutsche's CFO since 2008. Schenk was the CFO of German utility E.ON before joining Goldman last year.
- The reported shakeup comes after U.K. regulators and the N.Y. Fed took aim at Deutsche's financial reporting.
Oct. 27, 2014, 12:52 PM
- “Judging from the market reaction today, investors don’t completely believe in the ECB," says Peter Garnry, head of equity strategy at Saxo Bank. "They are more pessimistic on the banks."
- Financial firms were among the worst performers today following the release of ECB stress tests over the weekend, falling 0.9% vs. the Stoxx Europe 600's decline of 0.6%. Hardest hit were the Italian lenders after that country's banks made up a disproportionate share of those who failed the exams. Not failing, but nevertheless hit: Unicredit (OTCPK:UNCFF, OTC:UNCFY) -2.6%, Intesa Sanpaolo (OTCPK:IITOF, OTCPK:IITSF, OTCPK:ISNPY) -3.1%. Italy's FTSE MIB index (NYSEARCA:EWI) led European declines, falling 2.3%.
- Also taking a hit despite no issues from the stress tests were Europe's larger banking powers: Santander (SAN -3%), Deutsche Bank (DB -1.6%), ING (ING -1.8%), BBVA (BBVA -2.3%).
- EUFN -1.4%
- Previously: ECB stress test failures centered among Italian banks
Oct. 24, 2014, 2:44 AM
- Thirty-one banks are set to participate in the Fed's 2015 stress tests, which will see how they can withstand pressures such as a spike in oil prices, a rise in the U.S. unemployment rate or an increase in risky corporate loans. The capital plans are due in January.
- Among the bank's that failed last year's tests are Citigroup (NYSE:C), and the U.S. units of HSBC (NYSE:HSBC), Santander (NYSE:SAN) and RBS (NYSE:RBS).
- Deutsche Bank (NYSE:DB) will participate for the first time, and has already felt pressure from the NY Fed, which has told it in a private letter that its regulatory reports were "low quality, inaccurate and unreliable".
- This Sunday, the ECB will release results for stress tests of 130 eurozone banks amid a deteriorating economic outlook for the region.
Oct. 23, 2014, 4:49 PM
- Not having had the pleasure of being subject to the stress test and CCAR previously, Deutsche Bank's (NYSE:DB) U.S. unit will be a participant next year
- As in prior years, those BHCs with large trading operations - BAC, C, GS, JPM, MS, WFC - will be required to factor in a global market shock as part of their scenarios.
- Those six, plus STT and BK - thanks to their custodial operations - will be required to incorporate a counterparty default scenario.
- Among the items in the severely adverse scenario is the unemployment rate jumping to 10%, a 60% dive in the stock market, and oil jumping to $110 per barrel (how about oil falling to $10 per barrel?).
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, IAI, SEF, IYG, FXO, FNCL, KBWB, RKH, QABA, FINU, KCE, KRU, KBWR, RWW, RYF, KBWC, FINZ, KRS
Oct. 13, 2014, 6:16 AM
- Deutsche Bank (NYSE:DB) is losing some of its strongest traders amid a clampdown on bad behavior, co-head of investment banking Colin Fan says.
- DB no longer rewards the best earners with a promotion or the highest bonuses if they aren't seen as team players, which is adding to the outflow of senior talent.
- “Some people are purely financially driven and they’re going to less regulated spaces, maybe it’s tech, maybe it’s hedge funds; we wish them well. These are people that probably won’t fit into the new banking environment anyway.”
- “I think the entire industry is being very deliberate” on culture changes. “We all firmly believe you cannot seriously be operating under the old culture.”
Oct. 12, 2014, 6:26 AM
- Deutsche Bank (NYSE:DB) executives think its litigation reserves, currently €5.4B, may be too low and should be increased to €7B, Der Spiegel says.
- Deutsche is currently involved in at least a thousand legal disputes including the alleged rigging of Libor and a forex scandal.
- See also: Bonuses withheld from top Deutsche Bank execs (Oct. 1)
Oct. 10, 2014, 12:52 PM
- The banking industry is very close to resolving too big to fail, says Jamie Dimon (JPM +0.6%), speaking publicly for the first time since his cancer diagnosis (other than his July earnings call appearance). He's appearing at a conference roundtable alongside Morgan Stanley's (MS +0.8%) James Gorman, Deutsche's (DB -0.9%) Anshu Jain, and Bank of America's (BAC +0.7%) Brian Moynihan.
- Webcast here
- The most pointed remarks so far come from Deutsche's Jain, who tells those who would continue to further strangle the banks with more regulation to look to Europe. Straightforward banking - taking deposits and making loans - is far more the norm there then here, he says, and the forcing of banks to trim businesses and balance sheets is a large contributor to the Continent's stagnant growth.
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, IAI, SEF, IYG, FXO, FNCL, KBWB, RKH, QABA, FINU, KCE, KRU, KBWR, RWW, RYF, KBWC, KRS, FINZ
Oct. 8, 2014, 2:18 AM
- Eighteen of the world's largest banks, ranging from Credit Suisse (NYSE:CS) to Goldman Sachs (NYSE:GS), have agreed to give up the right to "close out" deals on derivatives contracts if a financial institution runs into trouble, FT reports.
- The International Swaps and Derivatives Association is due to announce the agreement to change its “protocols”, which govern the $700T market, in the next few days. They will take effect from January 1, 2015.
- Related stocks: HSBC, JPM, OTC:BNPZY, DB, BCS, BAC, SAN, C, RBS,
Oct. 6, 2014, 3:42 PM
- Though the hope is for a deal before year's end, one person close to the talks says a settlement is more likely in early 2015. At issue is alleged manipulation of benchmark interest rates, and Deutsche Bank (DB +0.1%) would become lender number eight to be punished by the U.S. in recent months.
- The primary agencies going after Deutsche are the U.S. CFTC and DOJ, and the U.K. FCA.
- Late last year, the bank paid €725M to the EU over similar charges, and in Q2 Deutsche boosted its litigation reserves by about €470M to €2.2B. It also raised its pool for contingency liabilities to €3.2B from €2B, though this had more to do with MBS claims.
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