Deutsche Bank Defends Itself With Stock Near All-Time Low
December 06 2018 - 11:20AM
Dow Jones News
By Jenny Strasburg
Deutsche Bank AG, its shares trading near all-time lows, sought
Thursday to reassure investors about the German bank's stability
following a fresh wave of negative news, including a surprise raid
on its Frankfurt headquarters last week.
Finance chief James von Moltke said in a televised interview
that Deutsche Bank experienced a "very muted client response" to
last week's raid by German authorities of Deutsche Bank offices in
a money-laundering and tax-evasion probe.
"To date, we're not aware of any wrongdoing on our part," Mr.
von Moltke said in the interview Thursday with CNBC. Bank
executives had no prior knowledge of the investigation, he
said.
Last week's raid was expected to be discussed at a multiday
meeting of Deutsche Bank's supervisory board ending Thursday,
according to people close to the bank.
Frankfurt prosecutors swarmed the bank and a Deutsche Bank
employee's home with 170 officers over two days. They said their
investigation stemmed from documents in the so-called Panama Papers
leak of records in 2016 about a now-defunct Panamanian law firm
that specialized in offshore holding companies.
Deutsche Bank has said it previously handed over "all the
relevant information regarding Panama Papers," and it is
cooperating in this investigation as well.
Mr. von Moltke said on Thursday that Deutsche Bank's financial
targets remain unchanged, meaning it still expects to make a profit
this year for the first time since 2014. He said the bank's capital
and liquidity positions are strong, reflecting Deutsche Bank
executives' repeated need to reassure clients and investors about
the lender's fundamental soundness.
Deutsche Bank shares were down about 4% in afternoon trading
Thursday in Frankfurt, roughly in line with European banks amid
broader market declines. Deutsche Bank shares have fallen 51% this
year to all-time lows below EUR8.
Deutsche Bank on Thursday and last week defended senior
executives. Improving compliance and money-laundering controls "has
been a real emphasis of current management," and the bank has made
"enormous investments" in fighting financial crime, said Mr. von
Moltke, who joined the bank in 2017, in the CNBC interview.
Seven months ago, Deutsche Bank fired Chief Executive Officer
John Cryan and replaced him with longtime employee Christian
Sewing. Deutsche Bank is again on the defensive, facing new legal
threats and persistent doubts about its ability to make money.
A stepped-up focus by investigators on activities in the private
bank, previously run by Mr. Sewing, has helped fuel investor
concern that current management could get swept into new legal
problems. Last week German investigators searched offices of
management-board members in Frankfurt as part of their raid.
One of those executives, Sylvie Matherat, the bank's regulatory
chief, oversees the division responsible for detecting and
preventing financial crime by clients of the bank. The Wall Street
Journal reported last week that she has come under pressure amid
discussions of a potential management shake-up, citing people close
to the bank. There was no indication Thursday of an imminent change
in management.
Deutsche Bank also this year attracted scrutiny as a primary
handler of U.S. dollar transactions through scandal-ridden Danske
Bank's Estonian branch, the subject of multiple money-laundering
investigations. Deutsche Bank executives have played down the
lender's role as a so-called correspondent bank for Danske in the
past, saying Deutsche Bank didn't have front-line responsibility to
monitor Danske Bank's clients but was an intermediary.
Write to Jenny Strasburg at jenny.strasburg@wsj.com
(END) Dow Jones Newswires
December 06, 2018 12:05 ET (17:05 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
Deutsche Bank Aktiengese... (NYSE:DB)
Historical Stock Chart
From Apr 2024 to May 2024
Deutsche Bank Aktiengese... (NYSE:DB)
Historical Stock Chart
From May 2023 to May 2024