Deutsche Bank’s regulatory capital ratios
Deutsche Bank (DB) is proving to be the riskiest bank to the global economy after it failed the Federal Reserve’s 2016 stress tests in June, a view shared by the International Money Fund (or IMF). The IMF considered Deutsche Bank the riskiest global bank after it failed to meet the 2016 capital requirements.
Deutsche Bank’s stock is down nearly 40% in 2016 so far. Capital reserves are important to restore the confidence of regulators and investors.
During the 2Q16 earnings call, John Cryan, CEO of Deutsche Bank, noted, “We have continued to de-risk our balance sheet, to invest in our processes and to modernise our infrastructure. However, if the current weak economic environment persists, we will need to be yet more ambitious in the timing and intensity of our restructuring.”
The Common Equity Tier 1 Capital Ratio, a closely tracked measure of financial strength, rose to 11.1% in September, higher than 10.8% in the previous quarter. For 2016, the bank expects the fully loaded CET 1 ratio to remain broadly flat. Further, litigation expenses, restructuring costs, and de-risking of non-core operations have impacted the CET 1 ratio.
Deutsche Bank has set a target of 12.5% for its CET 1 ratio and a leverage ratio of 4.5% by the end of 2018. Although Tier 1 capital is still within the current regulatory minimum, it is below the ratio required by 2019. Its European counterparts (EUFN) such as Credit Suisse (CS), UBS, and Royal Bank of Scotland (RBS) have been struggling to build capital reserves to meet regulatory requirements.
On October 22, 2016, AT&T announced that it would acquire Time Warner for $107.50 per share, or $53.75 per share in cash and $53.75 per share in AT&T stock.
After opening on a bearish note on Wednesday, Tesla (TSLA) was trading with 4.8% losses for the day, near $195.25 at 1:16 PM ET.
With voting conducted in seven phases panning six weeks, India’s (EPI) elections have been a grand affair—to say the least. Tomorrow is the day of the results.
Qualcomm (QCOM) stock fell more than 10% in the first half of trading on May 22 after it lost its licensing lawsuit with the US FTC (Federal Trade Commission).
Apple (AAPL) suffered a setback recently when the US Supreme Court allowed an antitrust lawsuit against the company to proceed.
Today doesn’t seem to be a good day for electric vehicle companies. Earlier today, NIO stock hit an all-time low of $4.00.
The cannabis sector has been struggling to find direction on May 22, with cannabis stocks trading on a largely mixed note in the first half.