Markets

New Deutsche Bank boss Sewing is 'sick and exhausted of bad news'

New Deutsche Bank boss Sewing is 'sick and exhausted of bad news'

Christian Sewing said in a memo to staff on Friday that "the newsflow is not good" but stressed that the bank is financially sound and is moving forward after several tough years.

"We appreciate S&P's statement that 'management is taking tough actions to cut the cost base and refocus the business in order to address the bank's now weak profitability", the German lender said.

The plan included aggressive cost-cutting commitments by Deutsche in a bid to improve profitability and refocus on core European markets.

Deutsche was the most active lender in NY commercial real estate between October 2016 and September 2017, with more than $6 billion given in non-construction mortgages and more than $2 billion in construction loans.

S&P had rated Deutsche Bank's long-term credit at A-, on negative credit watch.

Deutsche Bank said it doesn't comment on specific regulatory feedback, adding, "We are highly focused on addressing identified weakness in our USA operations".

This followed a report on Thursday that the US regulator viewed the lender as "troubled" previous year, and on Friday a Standard & Poor's credit rating downgrade to BBB+ from A-.




Deutsche Bank's US operations received a "troubled condition" assessment from the Federal Reserve a year ago, prompting the bank to take measures to decrease risky lending operations and trading. That was one or two notches below most European competitors, with Switzerland's UBS rated A+ with a stable outlook.

"The bank appears set for a period of sustained underperformance compared with peers, many of whom have now finished restructuring", the ratings agency said.

"We have made progress in remediating them over the past year", he wrote.

In a media statement the bank said: "The ultimate parent of the Deutsche Bank Group, Deutsche Bank AG, is very well capitalized and has significant liquidity reserves". We're not yet where we want to be, but we're steadily getting there.

The report sent Deutsche's shares down by 7% yesterday to their lowest-ever closing level.

Outlining its latest restructuring in April, Deutsche said it would be pulling back from certain trading and investment banking operations in the US.

Sewing emphasised the financial strength of Deutsche Bank's USA operations in his memo to staff and said: "The problems we face are not a question of financial soundness, but involve identified infrastructure and control deficiencies, which we are tackling".


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