Deutsche Bank Shares Lifted by CEO's Comments
28 September 2016 - 7:16PM
Dow Jones News
By Monica Houston-Waesch
FRANKFURT--Deutsche Bank AG (DB) shares jumped Wednesday, coming
back from recent lows after Chief Executive John Cryan sought to
reassure investors about the German lender's capital strength.
At 0818 GMT, its shares were up 3.3% at EUR10.90.
Mr. Cryan told Germany's Bild newspaper that Deutsche Bank
didn't need a capital increase or government assistance, broadly
reiterating the bank's statement earlier this week.
"I never asked the chancellor for help, and never indicated
anything of the kind," Mr. Cryan was quoted as saying.
Deutsche Bank shares had been battered in recent days by worries
it could be overburdened by a looming fine from the U.S. Department
of Justice related to its mortgage-securities investigation. The
bank has confirmed that the DoJ made an initial proposal to settle
for $14 billion, following a report by The Wall Street Journal last
week. But the bank said fines generally come in well below the
initial proposal.
Nevertheless, the prospect of a heavy fine, even one
significantly less than $14 billion, sparked concern that the bank
would require a capital increase or would have to make a plea for
government assistance.
On Wednesday, a trader said the share had been "bombed out and
oversold."
After plunging 7.5% in Europe on Monday, Deutsche Bank shares
continued to go downhill into Tuesday afternoon, when they
recovered after a DoJ official said penalties could be reduced for
banks that cooperate in U.S. probes, without mentioning Deutsche
Bank specifically.
Traders on Wednesday also said Deutsche Bank's $1.2 billion sale
of Abbey Life to Phoenix Group Holdings was positive. Phoenix said
two weeks ago it had been evaluating a deal to buy Abbey Life, but
investors were worried that the U.K.'s vote to leave the European
Union might complicate a deal, a trader said.
In the Bild interview, Mr. Cryan said restructuring at Deutsche
Bank remains on track and that it is in a better capital position
now than it was two years ago. "That's what counts," Mr. Cryan
said.
-Write to Monica Houston-Waesch at nikki.houston@wsj.com
(END) Dow Jones Newswires
September 28, 2016 05:01 ET (09:01 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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