Skip to main content

Deutsche Bank shares plunge, shares are down -14% @ 8 EUR

The German banking giant Deutsche Bank has seen its share price plummet by more than 14% on Friday, reaching its lowest level since November 2022. The reason behind this sharp decline is the surge in the cost of insuring its debt against default, which has reached its highest level since early 2019.


Credit default swaps (CDS) are contracts that allow investors to hedge against the risk of a borrower failing to repay its obligations. The higher the CDS spread, the more expensive it is to buy protection and the more risky the borrower is perceived to be.

According to data from S&P Market Intelligence, Deutsche Bank's five-year CDS spread jumped above 200 basis points (bps) on Friday, up from 142 bps on Wednesday. This means that it would cost $200,000 per year to insure $10 million worth of Deutsche Bank's debt for five years.

This spike in CDS spreads reflects growing concerns about the health and stability of Europe's banking sector, which has been hit by a series of shocks in recent weeks. These include:

- The state-backed rescue of Credit Suisse, Switzerland's second-largest bank, which had to write off $17 billion worth of its riskiest bonds (known as Additional Tier-1 or AT1) as part of a deal with UBS to avoid collapse.

- The turmoil among regional US banks, which have suffered heavy losses due to their exposure to Archegos Capital Management, a family office that imploded after making highly leveraged bets on stocks.

- The uncertainty over the impact of rising inflation and interest rates on banks' profitability and solvency.

Deutsche Bank has been struggling for years to restore its reputation and profitability after being plagued by scandals, fines and lawsuits. It has undergone several rounds of restructuring and leadership changes in an attempt to cut costs and focus on its core businesses.

However, these efforts have not been enough to convince investors that Deutsche Bank has overcome its legacy issues and can compete effectively with its rivals. The bank's market capitalization has shrunk by more than half since 2019 and now stands at around $19 billion.

Deutsche Bank declined to comment on its share price performance or CDS spreads when contacted by Reuters. The German financial regulator BaFin also had no comment.

Some analysts believe that Deutsche Bank may need further support from the government or other institutions if it wants to survive in the long term. Others argue that Deutsche Bank still has some strengths and opportunities that could help it turn around its fortunes.



Labels:

Comments

Post a Comment

Popular posts from this blog

Nasdaq Balti börsidel algas kauplemine Grenardi Groupi võlakirjadega

Nasdaq Balti börsidel algas kauplemine Grenardi Groupi võlakirjadega. See on märkimisväärne sündmus nii ettevõtte kui ka Balti kapitaliturgude jaoks. Siin on lühike kokkuvõte olulisest: Ettevõte: Grenardi Group Tegevus: Juveelipoodide kett Balti riikides Võlakirjade maht: 12 miljonit eurot Intressimäär: 10% aastas Lunastamistähtaeg: 16. aprill 2027 Investorid: Enamasti Läti investorid (85%), 12% Eestist ja 3% Leedust Noteerimine: Nasdaq Riia börsil Mõned olulised punktid: Grenardi Group on edukalt kaasanud 12 miljonit eurot kapitali avaliku võlakirjapakkumise kaudu. See on ettevõtte kolmas võlakirjaemissioon ja esimene noteerimine reguleeritud börsil. Suur investorite huvi näitab usaldust Grenardi Groupi ja Balti turu vastu. Võlakirjadest saadud raha plaanitakse kasutada ettevõtte kasvatamiseks ja Balti turul konkurentsipositsiooni tugevdamiseks. Grenardi Groupi juht Ģirts Rudzītis ütles: "Oleme avaliku pakkumise tulemustega väga rahul. Täname igaüht neist...
Post a Comment
Loe edasi »

Storent Holding avaldas 2023. aasta auditeeritud aruanded: kasumlik aasta hoolimata ümberhindamisest

Sissejuhatus Storent Holding, mille eelmiseks ärinimeks oli Storent Holdings SIA, avaldas hiljuti oma konsolideeritud ja eraldiseisvad 2023. aasta finantsaruanded. Auditeeritud aruanded näitavad kasumlikku aastat hoolimata ümberhindamisest ja tulumaksueelses kasumis tehtud muudatustest. Aruanne annab ülevaate olulistest sündmustest ja finantstulemustest 2023. aastal ning ettevõtte väljavaadetest 2024. aastaks. Olulised punktid Kasv 2023. aastal: Storent Group saavutas märkimisväärse kasvu, investeerides 13 miljonit eurot uutesse seadmetesse ning jätkates investeeringuid IT-süsteemidesse ja protsesside automatiseerimisse. Ümberhindamisest tingitud muudatused: ettevõtte juhtkond otsustas 2023. aastal muuta püsivara amortisatsiooni arvestusmeetodit, võttes arvesse jääkväärtust. Muudatuste tulemusel kaasnes korrigeerimine tulumaksueelses kasumis. Kasumlikkus: Aasta kogukäive oli 43,8 miljonit eurot, EBITDA 13,7 miljonit eurot ja tulumaksueelne kasum 5,5 miljonit eurot. Uus võlakirja...
Post a Comment
Loe edasi »

What's happening in the commercial real estate

Here's a breakdown of what's happening in the commercial real estate (CRE) market, focusing on office properties and using 1440 Broadway as a case study: Trends in the Office Property Market: The Rise of Remote Work: The COVID-19 pandemic accelerated the adoption of remote and hybrid work models. Many companies are downsizing or re-evaluating their office space needs. This is leading to increased vacancy rates and declining rental income for office properties. Changing Preferences: Businesses rethinking office spaces are now prioritizing flexibility, collaboration spaces, and amenities that create a compelling reason for employees to come to the office. Economic Uncertainty: Rising interest rates and potential economic downturns are making investors and lenders more cautious about commercial real estate investments, including office properties. The Case of 1440 Broadway: Loan Delinquency: The $400 million loan backing 1440 Broadway becoming delinquent highlights...
Post a Comment
Loe edasi »