Deutsche Bank co-chief executive John Cryan on February 09 told staff and investors that the bank was "rock solid" as he sought to halt a slump in its shares and bonds. Deutsche Bank shares fell another 4 percent on February 09 below their 2009 low and to their lowest level for more than 25 years, taking their slump this year to more than 40%. Its bonds and Additional Tier 1 securities have also sold off.
"Deutsche Bank remains absolutely rock-solid, given our strong capital and risk position," Cryan said in an open letter to staff published on its website. He told staff to pass the message onto clients after the recent volatile market moves.
He said that strong position allowed it to reassure investors on February 08 that Deutsche was able and willing to pay coupons to investors of its Additional Tier 1 capital, after talk swirled that it may not be able to pay coupons.
Cryan also tried to soothe concerns about the scale of litigation costs the bank could face and the adequacy of its legal provisions.
"We will almost certainly have to add to our legal provisions this year but this is already accounted for in our financial plan," he said.
Cryan said he was trying to successfully and quickly resolve open regulatory and legal cases.
"I want to remove the uncertainty among staff and in the market that these cases cause," he said, saying a small group of senior people, led by him, would focus on this.
He said the bank's management board met last week and also confirmed its vision to provide financial services across all customer segments in its home German market, to be the top bank for its corporate, institutional and fiduciary clients in Europe, and "the best foreign bank in the United States and Asia."
He said to achieve this the bank was hiring more people in equity sales and research "to regain our leadership in the equities markets."
It was also bringing in some talented senior bankers into its corporate and investment banking unit and was investing in technology in its retail banking and asset management businesses, he said.
Deutsche Bank shares fell another 4.3 percent on February 09 to 13.23. The broader European banking index was down 3.7%.
Deutsche Bank's shares have tumbled amid concern Cryan may need to raise capital again to strengthen its balance sheet as the bank gets battered by litigation costs and weak trading.
Fourth quarter results for its investment bank were also far weaker than at its US rivals.
It has not been alone in the banking sell-off, as analysts said concerns about losses from energy loans, the negative impact of low interest rates, and a gloomy outlook for the European economy were all dragging on sentiment.
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