Shares of one of Europe’s largest banks Deutsche Bank on March 24 fell nearly 15%, informed Bloomberg. According to Frankfurt Stock Exchange XETRA trading data, they traded at the minimum level of €7.945 per security.
According to Bloomberg, the decline in Deutsche Bank shares has reached an all-time high in the past three years. This happened against the background of the announcement of the early redemption of subordinated bonds of the second level with a maturity in 2028. This is usually done to show the solvency of the organization, but the shares began to fall due to the fears of investors in the midst of the financial crisis.
Shares of Deutsche Bank have fallen nearly 20% since early March, led by the rise in the value of the bank’s credit default swaps to 200 basis points. How Remarks Kommersant is the maximum since 2019.
Citigroup Inc. analysts, according to Bloomberg, attributed the bank’s stock plunge to an “irrational market.” “The risk is that different headlines in the media will impact depositors from a psychological perspective, regardless of the fidelity of the original reasoning,” the publication quotes quoting an excerpt from the analysts’ note.
At the same time, Deutsche Bank CEO Christian Scheuing said he had “no concerns about the viability or the valuation of the assets” of the bank. “To be very clear: Deutsche is NOT the next Credit Suisse,” quotes Bloomberg.
German Chancellor Olaf Scholz, amid the bank’s troubles, said there was no doubt about Deutsche Bank’s profitability and therefore there was no need to provide assistance to the bank. He also said that “the banking system in Europe is stable”.
“Deutsche Bank has fundamentally modernized and revamped its business model and become a very profitable bank. There is no need to worry about anything,” Scholz told a press conference in Brussels.
Problems in the banking systems of a number of Western countries have been observed since the beginning of March. Then the California Department of Financial Protection announced the bankruptcy of the American bank Silicon Valley (SVB), the 16th largest in the United States. It is the biggest bankruptcy in the United States since 2008. On March 19, news broke of the purchase of Swiss bank Credit Suisse by larger player UBS due to customer exodus. Credit Suisse shares fell sharply shortly before, on March 15.
