Deutsche Bank Shares Dive on Investor Worries
September 30 2016 - 05:40AM
Dow Jones News
FRANKFURT—Deutsche Bank AG shares nose dived early Friday,
hitting new multiyear lows on news some major clients have moved to
withdraw billions of dollars from the bank because of concerns
about its stability.
"It's a pitch black start to the last day of the quarter for
both Deutsche Bank and the German stock market," said Jochen
Stanzl, analyst at CMC Markets in Frankfurt.
At 0930 GMT, Deutsche Bank shares were trading down 5.5% at
€10.28. The lender's stock has fallen more than 50% this year.
"There's next to no one who wants to catch a falling knife,"
said a Frankfurt trader.
Deutsche Bank news weighed on markets in the U.S. and Asia
overnight and hit European banking shares early Friday. The
Eurostoxx banking index traded 3.7% lower midmorning at 88.17
points.
The rout in Deutsche Bank shares has picked up steam in past
sessions, after The Wall Street Journal reported two weeks ago that
the U.S. Justice Department had proposed it pay $14 billion to
settle a mortgage-securities investigation. The bank has said it
was unlikely to pay "anywhere near" that amount.
This week major clients have taken steps to pull billions in
securities or cash from the bank, people close to the clients and
the bank said late Thursday. Institutions reducing their exposure
include AQR Capital Management LLC, Capula Investment Management
LLP, Citadel LLC, Luxor Capital Group LP, Magnetar Capital LLC and
Millennium Management LLC, these people said.
The amounts of assets either withdrawn or set for withdrawal are
in the billions of dollars, a fraction of the hundreds of billions
of dollars the bank has in deposits.
Deutsche said in a statement it is confident the vast majority
of investors understand its stable financial position and strategy
progress.
Rob Copeland and Jenny Strasburg contributed to this
article.
(END) Dow Jones Newswires
September 30, 2016 05:25 ET (09:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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