Big enough to spark systemic risk in the global banking system, so it's not going to be allowed to fail, but it continues to make headlines for all the wrong reasons...
Deutsche Bank AG extended losses as analysts signaled that legal costs may force the German lender to raise capital even if it whittles down the U.S. demand for $14 billion over its mortgage-backed securities business.
The shares fell as much as 2.6 percent in Frankfurt trading Monday and were 0.4 percent lower at 2:03 p.m., pushing the loss for this year to 47 percent.
Germany’s biggest bank would be “significantly undercapitalized” even if the bank had sufficient provisions to cover an eventual settlement with the Justice Department, Andrew Lim, a Societe Generale analyst, said in a note to investors Monday.
Any settlement above 5.4 billion euros ($6 billion) would imply a capital increase is needed just to pay the fine, he wrote. That’s about the amount the bank had in reserve for all legal disputes at the end of the first half.
Among other cases, Deutsche Bank still has to deal with a probe of its equities business in Russia and is struggling to sell its German retail lender Deutsche Postbank AG.