Deutsche Bank's US Subsidiary Reportedly Put On Federal Problem Bank List


This followed a report on Thursday that the USA regulator viewed the lender as "troubled" previous year, and on Friday a Standard & Poor's credit rating downgrade to BBB+ from A-.

"HNA remains committed to Deutsche Bank's long-term success and looks forward to continuing to work with the management team in support of that goal", a spokesman for HNA said.

The new chief executive of Deutsche Bank is already "sick and tired" of the bad news emanating from Germany's beleaguered banking giant, following a fresh stream of negative headlines overnight.

In his letter, Sewing also addressed United States regulatory concerns following the Wall Street Journal report that said the Federal Reserve had designated Deutsche Bank's operations past year to be in a "troubled condition".

As trading got under way Friday, the bank's stocks rebounded 1.8 percent.

He noted that the ratings agency predicts the bank will eventually return to steady profits and that its outlook was rated as "stable", meaning further downgrades are not envisioned. DZ Bank restated a "buy" rating on shares of Deutsche Bank in a research report on Thursday, May 24th.

"While we consider (Deutsche's) management is taking tough, although likely inevitable, actions and proposes a logical strategy to successfully restore the bank to more solid, sustainable profitability over the medium to long term, the bank appears set for a period of sustained underperformance compared with peers, many of whom have now finished restructuring", S&P said.

More news: Possible Nintendo’s E3 Game Announcements Leaked

Christian Sewing reiterated a commitment to Deutsche's turnaround in his message to staff, saying the bank will prove that it has "earned a better valuation" on the financial markets.

The bank's share price Thursday plunged to near its all-time low on the Frankfurt stock exchange - by 7.2 percent to 9.07 euros - before clawing back about 3.5 percent Friday.

The bank will reduce the current number of employees by over 7,000 from current levels by the end of 2019, Mr Sewing vowed last week, providing the first concrete job cuts figure since announcing a large-scale restructuring of the CIB division in April.

But he admitted that the newsflow was "not good".

"We have made progress in remediating them over the past year", he wrote. That was one or two notches below most major European competitors. "We're not yet where we want to be, but we are steadily getting there".

The Journal cited sources that said a subsidiary of the bank, Deutsche Bank Trust Company Americas, was given a "problem bank" rating by the Federal Deposit Insurance Corporation, the government body that provides it with insurance.