Tag Archives: Deutsche Bank AG

Deutsche Bank are struggling and the stock has plummeted since the financial crisis

Deutsche Bank reached a top right before the financial crisis in 2007. The stock peaked at $122, but since then it has plummeted. Some people think that this is the end of the bank and some think that the bank will come back. The stock closed at $10,70 on Tuesday.

The bank has been struggling for years but they are not alone. They have a lot of challenges inside its own bank, but European monetary policy and other political risk are also something investors should have on their watch list. Deutsche Bank will report earnings on Wednesday.

Deutsche Bank said in a report that it intends to reduce personnel by at least 7 000 by the end of 2019. It`s a big challenge to reduce personnel cost for German corporations, because the labor laws are very strict.

European banks (EUFN) has suffered so far in 2018. UKs RBS and Barclay's is down. So are Switzerlands UBS, Spains Santander and Netherlands ING, but Germany`s Deutsche Bank is one of the worst.

The Fed continues to tighten but the ECB is till «printing» money. We know the story of some of the U.S banks. They have gone straight up, but the stocks in Europe have under-performed despite the fact that the ECB continued to blow up the balance sheet.

The ECB balance sheet has gone straight up in three years while the Euro stoxx has slowly declined. So is it for the P/E ratio of the MSCI Europe Index (IEUR) which is down about 50 percent.

Two former Deutsche Bank AG traders were found guilty by a New York jury on Wednesday last week of engaging in a scheme to manipulate the Libor benchmark interest rate between 2005 and 2011.

Libor (the London interbank offered rate) underpins trillions of dollars of financial products and is based on what banks say they believe they would pay if they borrowed from other banks. A case like this didn`t help the banks reputation.

Deutsche Bank has long been struggling to turn a profit under CEO John Cryan`s tenure, but earlier this year, Christian Sewing replaced Cryan and became new CEO of the bank. Deutsche Bank is working hard to strengthen its brand in its home market.

Sewing is known for being a cost-cutter. So far, he has cut about 1,700 jobs and eliminated daily office fruit bowls. He is also planning to shrink the New York office by 30 percent and move away from Wall Street.

The bank`s revenue is down 21 percent in the last two years. It seems it will drop again this year and that will be to its lowest level in a decade. They are also losing market share.

A few years ago, people were waiting for their turn to pay bills in the bank. And you know what, they paid for it. Of course. An employee did it for the customers. They paid for the service. But this has changed.

Now, people have internet and they can log in to their own bank account and do all the job alone. But who is paying for it now? The customers. The one that is doing the job. Wow. What kind of service is that? You do the job and you pay for it. That`s business. But it will change. This way of thinking belongs to the old school.

Deutsche Bank AG is expected to report earnings on Wednesday 24 October 2018 before market open. The report will be for the fiscal Quarter ending September 2018. The reported Earnings for the same quarter last year was $0,35.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Some banks are trading at record low

«Money makes the world go around», and most of the money in this world is in the banks. Simply because it is their product. They sell money like hot dogs on the corner. How hot are bank stocks at the moment?

Bank stocks have plummeted so far in 2016. Some of them are trading at 25 – 30 percent of their book value. A brutal start of the year for the banks, and the question is when is the time to jump in again?

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Stoxx 600 Banks Index is down nearly 30% and tells us that the market is oversold. Normally it`s oversold at 30, but now it is below 20. It is the lowest ever! The valuation of the European stocks is 13 times estimated earnings, which is down from its peak at 17.

Many investors obviously jumped in today and lifted the European stock market. A rebound in bank stocks lifted the marked up from its lowest level since 2013, and Deutsche Bank AG announced earlier today that they will buy back about $5,4 billion in bonds.

Deutsche Bank AG is up over11% on the news on friday. Credit Suisse is up over 6%. Many bank stocks are up on friday. Not only in Europe. JPMorgan Chase & Co, which is nearly ten times larger than Deutsche Bank AG is also up about 8% on friday (12:30 pm New York).

Many of the bank stocks did never rebound from the peak in 2007, and many of them are trading at record low levels. How easy is it for the banks to do business with low rates and low oil prices in the middle of a currency war?

Fed Chair Janet Yellen said in the testimony this week that the turmoil in the financial markets are threatening the stability and bank stocks are contributing. Thomas Jefferson said in 1816; «I sincerely belive…. that banking establishments are more dangerous than standing armies.»

That`s 200 years ago!

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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