Germany's troubled lender Deutsche Bank suffered more bad news Friday with a Standard and Poor's downgrade, despite its efforts to emerge from years of crisis with a new CEO and dramatic cost cuts. S&P lowered Deutsche's long-term credit rating from A- to BBB+, a day after the US Federal Deposit Insurance Commission classified it among "problem banks" which are judged to have "financial, operational, or managerial weaknesses that threaten their continued financial viability".
Further darkening the outlook, the US Federal Reserve has also branded the bank as being in "troubled condition". The bank's share price Thursday plunged to near its all-time low on the Frankfurt stock exchange - by 7.2 percent to 9.07 euros - before clawing back about 3.5 percent Friday.
Analysts at ING said they saw "a high likelihood of another downgrade by Moody's", another ratings agency. The string of bad news has raised troubling questions about the long-term viability of what has traditionally been seen as the too-big-to-fail bank of Europe's top economy.
In January, Union Investment fund manager Ingo Speich warned that if earnings don't recover in coming years, "something that is unthinkable today could occur, the breaking up of Deutsche and its merger with other large European companies".
Comments
Comments are closed.