Germany’s biggest lender posted an unexpected quarterly net profit – of 278 million euros.
But the main focus is still on how many billions it will have to pay out in US government fines for misselling toxic mortgage-backed securities before the 2007-2009 financial crisis.
The US Department of Justice had initially demanded over $14 billion (12.82 billion euros).
Uncertainty over when the issue will be settled is unnerving investors.
Craig Erlam, senior markets analyst at Oanda, said that worry is hanging over the entire European banking sector: “This is a massively systemically important bank, not just in Germany but in the eurozone as a whole. Aside from the fact that the bank is so big and is probably too big to fail, it really does re-ignite those concerns about the banking region in the euro area as a whole.
“We know the Italian banking system is extremely fragile, it’s responsible for around one third of the bad loans in the entire euro area region so it’s not just a base of what will happen to Deutsche Bank and how can politicians safeguard this. I think there is a domino effect concern here and the worry is if Deutsche Bank fell many would follow.”
In a letter to staff, Deutsche Bank’s chief executive John Cryan wrote: “Unfortunately, we have to assume that the situation will stay difficult for a while.”
He added the bank was working hard to wrap up negotiations for the fine “as soon as possible”.
Cryan also pledged to redouble efforts to restructure the bank, which is laying off staff and selling assets. (Euronews)