Stock Plunges

Report: Merkel Denies Aid to Deutsche Bank

Deutsche Bank Montage 2 source Arne Dedert DPA ceo john cryan-montage
Tough times for Deutsche Bank's CEO John Cryan.
  • Why it matters

    Why it matters

    Deutsche Bank’s restructuring plan might come too late to keep investors confident the bank can turn its fortunes on its own.

  • Facts

    Facts

    • Last week, the U.S. Department of Justice said Deutsche Bank was far more fragile than its competitors, with a relatively low cushion against shocks.
    • The U.S. watchdog is demanding Deutsche Bank pay $14 billion to settle a case involving the sale of mortgage-backed securities during the financial crisis.
    • Deutsche Bank has already shelled out more than $10 billion in regulatory fines and settlements over the past few years, including $2.5 billion to settle a LIBOR rate-fixing investigation.
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    Audio

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Shares of Deutsche Bank hit an all-time low on Monday, falling as much as 6.8 percent, after Focus magazine over the weekend reported that Chancellor Angela Merkel had ruled out government aid for the bank.

Deutsche Bank’s new nadir highlights investor concerns about its ability to overcome thousands of legal cases and reorganize to become sustainably profitable. Its shares have fallen 53 percent in the last year, as the German blue-chip Dax Index has risen 10.6 percent.

Even though a spokesman for Ms. Merkel and the bank denied the report, the bank’s shares tumbled, reflecting the worry surrounding an institution hobbled by legal costs and penalties from cases that stretch back a decade or more.

Record lows are hardly new for Deutsche Bank these days. Earlier share price lows were reached last month and in February of this year. At 2:45 p.m. in Frankfurt, the bank’s shares were trading down 5.4 percent at €10.74.

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