CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Deutsche Bank warns of Q3 loss

Article By: ,  Financial Analyst
October 8, 2015 3:36 PM

Deutsche Bank has made an announcement that it would see a record loss of more than €6 billion (£4.4 billion)  in the third quarter.

The warning came late Wednesday night (October 7th) and shocked analysts, as forecasts had been for profits of around €1 billion.

According to the bank, impairment charges of €5.8 billion were the reason for the huge losses. It says these charges are related to higher capital requirements for Deutsche's investment bank and reduced value of the company's retail banking division, Postbank, which is up for sale.

In addition, Deutsche saw a €600 million writedown on the value of its 20 per cent stake in Chinese Hua Xia Bank. The stake was purchased in 2005 and is currently worth around $3.5 billion. 

Another €1.2 billion has also been set aside to cover litigation costs – the bank has been caught up in the Libor-rigging scandal and may also be involved in Swiss investigations over suspected price-fixing in the precious metal market.

Dividends could be scrapped

Deutsche Bank has said that it may reduce or completely scrap dividend payments for shareholders this year.

However, some experts remain optimistic about the bank's financial outlook. Analysts Daniele Brupbacher and Mate Nemes told the Guardian that the bank's recent 'clean-up' was hiding some of the firm's good results.

"The goodwill impairment charges are paving the way for streamlining the bank's business portfolio and part of strategy 2020," they explained.

Jobs cuts

The bank's new chief executive John Cryan took over in July. Last month, it was reported that he was preparing to cut about 23,000 jobs – about a quarter of the workforce – in an attempt to reduce costs.

Bankers’ bonuses could also be cut. Mr Cryan told staff in a memo: "While compensation considerations are not based on this year's financial results alone, our shareholders will rightly expect employees to share something of the burden."

At midday in Frankfurt, share prices for Deutsche Bank were at 25.58 points. It will publish its full third-quarter results on October 29th.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024