|Bid||7.18 x 555100|
|Ask||7.18 x 230000|
|Day's range||6.88 - 7.25|
|52-week range||5.80 - 11.28|
|Beta (3Y monthly)||1.50|
|PE ratio (TTM)||718.30|
|Earnings date||24 Jul 2019|
|Forward dividend & yield||0.11 (1.63%)|
|1y target est||N/A|
(Bloomberg) -- Follow @Brexit, sign up to our Brexit Bulletin, and tell us your Brexit story. The pound fell to the lowest since 2017 as the market once again reckoned with no-deal Brexit risk after the contenders to be U.K. prime minister toughened their rhetoric.Sterling hit its weakest level in more than two years versus the dollar and a six-month low against the euro, as Brexit negotiations appeared to turn more hostile. Both leadership contenders Boris Johnson and Jeremy Hunt have said the so-called backstop plan to avoid a hard border in Ireland, considered essential by Brussels, would need to be scrapped.The U.K. currency extended its slide after Sky News reported that Johnson’s team was considering sending lawmakers home for up to two weeks in October to prevent them from blocking a no-deal Brexit. After a strong start to the year, the pound is the worst performer in the Group-of-10 in recent months and is at the lowest ever for this time of year.“It’s a bit of a perfect storm for the pound today,” said Neil Jones, head of hedge fund currency sales at Mizuho Bank Ltd. “The EU negotiations are not going well, U.K. data is poor and chances of a no-deal Brexit on October 31 are on the increase.”The pound slipped 0.9% to $1.2408 by 4:32 p.m. in London, taking its total decline so far this month to 2.3%. It weakened 0.5% to 90.40 pence per euro, the lowest since Jan. 11, and also fell against the Swiss franc to the weakest since August 2017.The beleaguered U.K. currency is finding few backers, with both leveraged funds and asset managers increasing their pound short positions, according to the latest data from the Commodity Futures Trading Commission. Deutsche Bank AG’s global head of currency research George Saravelos said the currency is not cheap enough, even after its recent slide, and that there is now close to a 50% chance of a hard Brexit.The president-designate of the European Commission, Ursula von der Leyen, said she was ready for a further extension of the Brexit deadline “should more time be required for a good reason.” However, a meeting of Brexit negotiators last week was one of the most difficult of the last three years, according to European officials, as they brace for talks to become more hostile under the next British government.Johnson and Hunt, who have long said they want the Irish backstop renegotiated, appeared to limit their room for compromise in a debate late on Monday.“This leaves only two options, no-deal Brexit, or no Brexit,” said Thu Lan Nguyen, a currency strategist at Commerzbank AG. “As both Johnson and Hunt have made clear they want Brexit, chances of a no-deal Brexit are rising.”(Writes through from 3rd paragraph.)To contact the reporter on this story: Charlotte Ryan in London at email@example.comTo contact the editors responsible for this story: Ven Ram at firstname.lastname@example.org, Neil Chatterjee, Anil VarmaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- When Deutsche Bank AG said it was exiting the business of servicing hedge funds as part of its historic retreat, French rival BNP Paribas SA seemed poised to benefit. The reality is more complicated.The two European banking giants are discussing how to transfer 150 billion euros ($168 billion) of balances linked to hedge funds at Deutsche Bank’s so-called prime-brokerage unit along with technology and potentially hundreds of staff, people familiar with the matter said. Yet the German lender’s clients have been pulling about $1 billion of funds per day and going elsewhere as the firms iron out the details, placing pressure on them to complete a deal soon, said the people, who requested anonymity as the talks aren’t public.Deutsche Bank Chief Executive Officer Christian Sewing is pulling back from catering to risky hedge-fund clients as he attempts to radically overhaul the troubled German lender while BNP counterpart Jean-Laurent Bonnafe wants to expand in the industry. A deal of this magnitude would be a stark example of the German firm’s retreat from global investment banking while potentially transforming its French rival from a small player in the so-called prime-brokerage industry to one of Europe’s biggest.Institutional ClientsRupert Trefgarne, a spokesman for Deutsche Bank, declined to comment. Alexandra Umpleby, a spokeswoman for BNP in London, said the bank “remains committed to growing its institutional client platform globally, including strengthening prime finance and electronic equities capabilities.” She declined elaborate on how much in client balances the French bank wants to acquire.BNP is providing “continuity of service” to Deutsche Bank’s prime-brokerage and electronic-equity clients as the two companies discuss transferring over technology and staff, according to a July 7 statement. The ultimate goal of the talks is for BNP to take over the vast majority of client balances, which are slightly less than $200 billion currently, the people said.Complex DealThe final shape of the deal remains unclear and faces a multitude of complexities, including departing clients. BNP executives are meeting with U.S. hedge-fund clients this week to convince them to stay following similar sit-downs with European funds last week, the people said.If hedge funds keep moving their business elsewhere, officials at the German bank may just relegate its assets tied to the prime finance division into the newly formed Capital Release Unit, one of the people said. That unit is winding down unwanted assets totaling 288 billion euros ($324 billion) of leverage exposure, and the prime brokerage is responsible for much of the 170 billion euros of leverage exposure that’s coming from the equities division into the division, also known as CRU, a presentation shows.Prime-brokerage divisions cater specifically to hedge funds, lending them cash and securities and executing their trades, and the relationships can be vital for investment banks. The prime business generated about $18.3 billion in fees in 2018 industrywide, about the same as revenue from trading corporate debt and currencies combined, data from Coalition Development Ltd. show.Deutsche Bank, which became a force on Wall Street in the wake of the financial crisis, has struggled to keep hedge-fund clients in recent years as it lurched from one problem to another. U.S. rivals JPMorgan Chase & Co., Morgan Stanley and Goldman Sachs Group Inc. are the top three firms in the business, while Deutsche Bank wasn’t among the top seven prime brokers in 2018, Coalition data show.BNP, based in Paris, has sought to profit from crisis before. The lender bought Bank of America Corp.’s prime-brokerage business in June 2008 as the credit crunch raged, acquiring more than 500 clients and 300 employees. Still, the firm has one of the smallest prime units among global banks, according to Coalition.Deutsche Bank’s hedge fund balances have been declining throughout the year as speculation swirled around Sewing’s intentions for the prime brokerage. One major client -- Renaissance Technologies -- has been pulling money from the firm for the last few months, people familiar with the matter said earlier this month.\--With assistance from Nishant Kumar.To contact the reporters on this story: Donal Griffin in London at email@example.com;Sonali Basak in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Michael J. Moore at email@example.com, Sree Vidya BhaktavatsalamFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Welcome to Capital Confidential—a weekly diary column featuring the best tidbits from around the U.K.’s business and political landscape from MarketWatch sister publication Financial News.
(Bloomberg) -- Just a few months after leading a funding round for Berlin-based fintech company Elinvar, Goldman Sachs Group Inc. is backing another startup in the German capital.The U.S. lender is investing 25 million euros ($28 million) in Raisin, an internet platform for bank-savings products, in exchange for a low single-digit percentage stake. The new funding brings the total volume of primary investments in the startup firm to 195 million euros. Earlier backers include PayPal Holdings Inc.Raisin intends to use the money to enter two additional European markets and the U.S. It has hired robo adviser Wealthfront’s Paul Knodel to create its American business. “Our goal is to start in the U.S. in 2020, the sooner the better,” Chief Financial Officer Frank Freund said in an interview. Some of the money raised could also be used for acquisitions, he said.Berlin has become a hotspot for ambitious German fintech firms: Peter Thiel-backed smartphone bank N26 is also expanding to the U.S., while banking platform provider Elinvar was set up by former employees of Deutsche Bank AG.Raisin was founded in 2012 by Tamaz Georgadze, who is chief executive officer, Freund and Michael Stephan. So far, the company has brokered 14 billion euros in customers deposits to 80 partner banks. Freund expects that number to increase toward 20 billion euros by the end of this year. On Raisin’s website, financial institutions offer their savings products, mainly competing on interest rates.“Raisin has developed a unique savings marketplace with a solid business model, impressive growth and a loyal customer base,” said Rana Yared, managing director at Goldman Sachs Principal Strategic Investments.Original Story: Goldman Sachs setzt auf Berlin mit weiterer Fintech-Beteiligung(Goldman Sachs quote added in last paragraph)To contact the translation editor responsible for this story: Stephan Kahl at firstname.lastname@example.orgReporters on the original story: Stephan Kahl in Frankfurt at email@example.com;Stefan Nicola in Berlin at firstname.lastname@example.orgEditors responsible for the original story: Erhard Krasny at email@example.com, Andrew BlackmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Federal Reserve Chairman Jerome Powell left it all but certain that the U.S. central bank will reduce interest rates this month for the first time in a decade.The debate now is how deep they will cut and what will they do afterward. As the July 30-31 meeting nears, here’s the outlook of some of the world’s biggest banks based on recent research reports.Forecasts range from JPMorgan Chase & Co. and Citigroup predicting a 25 basis point cut to Morgan Stanley forecasting double that amount.Goldman Sachs Group Inc.25 basis point reduction in July25 basis points of cuts in rest of 2019Powell offered a somewhat upbeat baseline view of growth, but nonetheless argued that uncertainty “continues to weigh” on the outlook. In our view, this was a strong signal that the trade truce with China and the strong June jobs reports have not derailed the case for a July rate cut. We increased our odds of a rate cut; for the July meeting, we place the subjective odds of a 25 basis point cut at 75%, a 50 basis point cut at 15% and unchanged policy at 10%. Our modal expectation remains a 25 basis point cut at both the July and September meetings.JPMorgan Chase & Co.25 basis point reduction in July25 basis points of cuts in rest of 2019It is understandable that Chair Powell remained committed to the storyline supporting action in July. The global backdrop remains concerning, as business sentiment continues to deteriorate and the disinflationary headwinds from slowing producer price index growth will weigh on corporate profits through the current quarter at least. Combined, this is damping global capex growth and feeding back to weakness in global industry. While the case for a 50 basis point cut has been undermined, the case for 25 basis point remains firmly in place and we stick with our call. Whether this is followed by 25 basis point in September will be highly data dependent.Morgan Stanley50 basis point reduction in JulyNo further cuts in rest of 2019The global economy has lost significant momentum in the past 12 months and trade tensions linger. This is now filtering through more prominently to the U.S. economy. Risks to the outlook remain skewed to the downside. A non-linear impact to growth could materialize if financial conditions tighten, bringing corporate credit risks to the fore. We therefore see a need to act decisively to protect against uncertainty and downside risks. Hence, we continue to expect a quick and front-loaded adjustment, i.e. 50 basis points cut by the Fed in July.Citigroup Inc.25 basis point reduction in JulyAnother 25 basis point cut expected this year, most likely in SeptemberEvents and data played out as we had expected – particularly the above-consensus June jobs number and benign G-20 outcome. While in our view this has decreased downside risk, that view is clearly not shared by Chair Powell. We are consequently falling in line with consensus and expect a 25 basis point rate cut in July. A 50 basis point cut is a real possibility, but given that even a 25 basis point cut is likely to provoke two or more dissents, 25 basis points may be the compromise policy outcome. Following the July cut we expect one additional 25 basis point cut, most likely in September.Bank of America Corp.25 basis point reduction in July50 basis points of cuts in rest of 2019Fed Chair Powell all but promised that a cut is coming in July. He is unfazed by the recent strong data in the U.S. The challenge is that this may not be a consensus view, making it difficult but not impossible to deliver a 50 basis point cut. For the time being, we should focus nearly as much on key global data as on U.S. indicators.Barclays Plc25 basis points cut in July50 basis points of cuts in rest of 2019Chair Powell’s testimony before the House Financial Service committee was surprisingly dovish. (The) congressional testimony increases our confidence in our forecast for at least a 25 basis point cut in the funds rate at the July Federal Open Market Committee meeting, followed by another 50 basis points in cuts by year end.UBS Group AG50 basis point reduction in JulyNo further cuts in rest of 2019At the June FOMC, Chair Powell was clearly looking to cut rates 50 b.p. at the July meeting. Doing so, in his view, would offset a confidence shock and manage the risks to the outlook. We will receive more data between now and the July 31 policy decision. Those data could mean the chair is not able to sway enough of the committee to a cut. But if Powell remains strongly inclined to cut, the FOMC is likely to show some deference. In light of the strong data, however, a negotiated 25 b.p. cut could be the compromise that emerges.Deutsche Bank AG25 basis point cut in July50 basis points of cuts in rest of 2019Chair Powell’s testimony and the minutes to the June FOMC meeting largely confirmed the Fed’s intention to ease monetary policy at their July 31 meeting. While we continue to expect the Fed to cut 75 bps by year end, we remain of the view that the Fed will ease 25 bps in July, and proceed on a meeting-by-meeting basis as they evaluate the incoming growth and inflation data.(Adds forecast from Deutsche Bank.)To contact the reporters on this story: Simon Kennedy in London at firstname.lastname@example.org;Reade Pickert in Washington at email@example.comTo contact the editors responsible for this story: Stephanie Flanders at firstname.lastname@example.org, Alister BullFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
LONDON/HONG KONG (Reuters) - Deutsche Bank is focusing its equity capital markets (ECM) business such as initial public offerings (IPOs) on Germany and Europe, scaling back in the United States and retreating from most of Asia, banking sources said. Germany's largest lender said on July 7 it would retain a "focused" ECM franchise as well as U.S. and European equity research teams as part of a 7.4 billion euro ($8.3 billion) shake-up which all but ends its ambitions on Wall Street.
(Bloomberg) -- Deutsche Bank AG settled a lawsuit from a Dutch affordable-housing provider that said the lender was responsible for bribery over derivatives trades, bringing an end to a long-running and at times colorful trial that was just entering its final stage.The bank paid 175 million euros ($197 million) to settle the case with no admission of liability, it said Friday in a statement. The deal ends a court battle that had featured testimony from a middleman who’s confessed to bribery, and tales of expensive sushi, “bubbly” wine, an exclusive nightclub favored by British royals, and meals at a Michelin-starred restaurant.In the London suit, Stichting Vestia -- a housing provider that nearly collapsed as a result of derivatives losses totaling more than 2 billion euros -- sought 840 million euros in damages in a bid to recoup some of those losses.It said some derivatives transactions with Deutsche Bank were “flawed” because the bank paid fees to a middleman when it entered into trades with the housing group. The bank said during the trial that the middleman seemed to be a legitimate intermediary, and it denied Vestia’s allegations.“With this settlement agreement, this dispute between Vestia and Deutsche Bank comes to an end,” Deutsche Bank said in a statement.“We are satisfied with the result,” Vestia said in a statement. The $197 million sum “is a substantial amount and makes a good contribution to the financial recovery.”The case is just one of a lengthy list of legal issues that Deutsche Bank is grappling with. The U.S. Department of Justice is investigating the bank as part of a broadened probe of Malaysia’s scandal-plagued 1MDB investment fund.The Vestia trial started in early May and had been scheduled to last until July 18. The settlement deal was struck as closing arguments in the trial were due to be heard.The trial had shed light on how the lender entertained clients. Bankers took a Vestia official to Michelin-starred restaurants and to Boujis, an exclusive London nightclub, where a group drank bottles of vodka and Dom Perignon champagne, according to the housing group’s filings. That club is popular with younger members of the British royal family, “some of whom have made the transition to responsible parenthood,” Vestia’s lawyer Rhodri Davies said during the case.(Updates with details from trial, from third paragraph.)To contact the reporter on this story: Kaye Wiggins in London at email@example.comTo contact the editors responsible for this story: Anthony Aarons at firstname.lastname@example.org, Christopher Elser, Joost AkkermansFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Dutch housing cooperation Vestia said on Friday Deutsche Bank would pay it 175 million euros ($197 million) to settle claims the German bank had improperly sold it interest rate derivatives. In a statement on its website, Vestia said it would cancel the suit it had been pursuing against Deutsche Bank at the High Court of Justice in London. Vestia nearly went bankrupt in 2012 after suffering 2 billion euros in losses on derivatives it had purchased from ABN Amro, Deutsche Bank and other major investment banks as a hedge against rising interest rates.
UBS has become the first broker to upgrade Deutsche Bank's stock following its initiation of a historic restructuring program.
(Bloomberg Opinion) -- An age-old question has reared its head again: Why can’t China create a globally competitive investment bank in the mold of Goldman Sachs Group Inc. or Morgan Stanley?It’s not like the country hasn’t tried. China International Capital Corp., a venture formed in 1995 with New York-based Morgan Stanley, foundered amid disputes between the local and U.S. partners and slipped behind newer rivals without ever becoming a global heavyweight.(1) Citic Securities Co. made an unsuccessful attempt to buy into Bear Stearns Cos. in 2007 (which was probably a lucky escape). Now add CLSA Ltd. to the list of failures.A common theme running through the exodus of foreign executives from Citic’s CLSA, detailed by Cathy Chan of Bloomberg News this week, and the earlier strains at CICC is the clash of cultures between Wall Street’s freewheeling practices and the more staid, hierarchical approach of Chinese state-controlled financial institutions. U.S. investment banks are highly competitive and individualistic, studded with rainmakers, big-hitting traders and star analysts who may earn vast pay packages and hold power that’s disproportionate to their place in the management structure. It’s a way of working that doesn’t gel easily with China’s top-down state industrial model.When one senior CLSA executive had concerns about the direction of his unit, “colleagues from Citic advised him to steer clear of conversations with the boss that didn’t involve flattery,” Chan wrote. Compare that with this profile of CICC from 2005: “Morgan Stanley's Western bankers were used to disagreeing openly with colleagues. CICC's Chinese employees preferred to resolve differences without confrontation, and in private.” Not much seems to have changed.These tensions took a toll on CLSA, a Hong Kong-based outfit with a reputation for independent-minded research that was acquired in 2013 by Citic Securities. The Chinese brokerage is an arm of Citic Group, a state-owned pioneer of the country’s economic reforms set up under the direction of Deng Xiaoping in the late 1970s. Before the takeover, CLSA was ranked in the top three for Asian research by institutional investors, along with Morgan Stanley and Deutsche Bank AG. By last year, it had dropped out of the top six, according to Greenwich Associates.As a group, Chinese investment banks and securities firms have failed to make much impact on international markets. The combined overseas revenue of the country’s 11 largest brokerages was just $3.5 billion last year, according to Bloomberg Intelligence analyst Sharnie Wong. That’s roughly on a par with the Asian revenue of BNP Paribas SA, which doesn’t rank among the biggest global investment banks. Chinese brokerages are relatively unsophisticated beside their Wall Street rivals, focusing mostly on equities trading – a business that Deutsche Bank AG said this week it’s exiting amid increased automation and low margins. Mainland firms have less of a presence in bond trading and structured products, which remain driven by humans and are the bread and butter of international banks. It could be argued that China doesn’t need a world-class investment bank, given the dominance of local firms in its increasingly important domestic market. The inclusion of the country’s shares in the MSCI Emerging Markets Index and its bonds in the Bloomberg Barclays index has driven billions of dollars of foreign money into Chinese capital markets. Chinese firms have also made headway in IPO underwriting in Hong Kong, dislodging Wall Street rivals in the league tables.Besides, global investment banking revenues have been sliding since the financial crisis, amid low interest rates and the trend toward automated trading. That would be a short-sighted view, though. If China is serious about modernizing its capital markets, it needs the expertise developed by leading international investment banks to provide better fundraising options for its companies. It may be no coincidence that Beijing has finally relented and allowed overseas banks to control their Chinese ventures, among them UBS Group AG, Nomura Holdings Inc., JPMorgan Chase & Co., Morgan Stanley and Credit Suisse Group AG. A slowing economy means efficient allocation of capital has become more more important than ever. Exposing local brokerages to overseas competition may spur them to raise their game.Chinese firms operating in Hong Kong are already moving up the curve in research as they try to make their way in the city’s more robust environment. An example is CGS-CIMB Securities, a venture between China Galaxy Securities Co. and Malaysia’s CIMB Group Holdings Bhd.A world-class investment banking operation needs more than research, though. Much of the competitive advantage for bulge-bracket firms derives from networks of relationships with companies and investors that have been cultivated over decades. Building such capabilities will take time.It’s hard to see this happening until China stops using financial firms as tools of the state. In 2015, the government leaned on brokerages to rescue a crashing stock market. Last month, it asked large securities firms to take over the role of providing financing to small and medium-size enterprises. If China is to produce its own Goldman Sachs, it’s unlikely to come from the sclerotic state economy. Look instead to the wellspring of Chinese innovation: the private sector. For that to happen, though, the state has to get out of the way.Ultimately, the biggest block to Beijing’s ambitions is Beijing itself. (Updates the eighth paragraph with Chinese firms dislodging rivals in Hong Kong IPO underwriting. An earlier version of this column corrected the spelling of Bear Stearns in the second paragraph.)(1) Morgan Stanley sold its CICC stake in 2010.To contact the author of this story: Nisha Gopalan at email@example.comTo contact the editor responsible for this story: Matthew Brooker at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
"That someone would let a tailor come on such a day is disrespectful," Sewing said in an interview with Handelsblatt on Thursday.
Deutsche Bank AG plans to lay off 126 employees in New York in the coming months, according to a filing the bank made with New York state that was made public on Thursday. The 126 employees are being let go for economic reasons and their final day will be between Aug. 7 and Aug. 21, according to a Worker Adjustment and Retraining Notification that the bank filed with the New York State Department of Labor on July 8. Deutsche Bank on Monday announced plans to cut 18,000 jobs worldwide, as part of a 7.4 billion euro (£6.6 billion) restructuring Chief Executive Christian Sewing hopes will turn around the bank, whose shares hit a record low last month.
Chief Executive Christian Sewing personally called Deutsche Bank staff members to admonish them for having suit fittings at its London office on the same day that hundreds of their colleagues were fired, Handelsblatt quoted him as saying.
(Bloomberg) -- The U.S. Department of Justice is investigating Deutsche Bank AG as part of a broadened probe of Malaysia’s scandal-plagued 1MDB investment fund, according to a person with knowledge of the matter.Investigators, who have spent years examining Goldman Sachs Group Inc.’s lucrative dealings with the fund, are now taking a closer look at a former Goldman executive who later worked at the German bank, said the person, who asked not to be identified discussing the confidential inquiry. U.S. authorities haven’t accused Deutsche Bank or the former employee of wrongdoing.The inquiry aims to determine whether Deutsche Bank might have violated foreign-corruption or anti-money-laundering laws as it helped 1MDB raise $1.2 billion in 2014, the Wall Street Journal said in an earlier report Wednesday. Tim Leissner, another ex-Goldman executive who pleaded guilty last year for his role in the scandal, has been helping with the Deutsche Bank examination, the paper said, citing unidentified people with knowledge of the matter.Tan Boon-Kee is a former Goldman Sachs banker who later worked at Deutsche Bank as Asia Pacific head of the financial institutions group. The Journal identified her as the banker being looked at by the Justice Department. Tan, who left Deutsche Bank last year, was interviewed by Singapore authorities in connection with 1MDB, people with knowledge of the matter said last year. She hasn’t been contacted by the Justice Department for more than a year, a person with knowledge of her situation said. Tan, now at Hong Kong-based insurer FWD Group Ltd., declined to comment.“Deutsche Bank has cooperated fully with all regulatory and law enforcement agencies that have made inquiries relating to 1MDB,” the Frankfurt-based company said in an emailed statement. It pointed to asset-forfeiture documents previously filed by the Justice Department indicating 1MDB misled Deutsche Bank during transactions. “This is consistent with the bank’s own findings in this matter,” the firm said in the statement.Justice Department spokesman Peter Carr declined to comment.Probes into 1MDB have mainly focused on more than $6 billion the fund raised in 2012 and 2013 with help from Goldman Sachs, which reaped almost $600 million in fees. The New York-based bank, which has said it’s cooperating with related investigations, has portrayed Leissner as a rogue employee who circumvented its internal controls. The Justice Department now expects to start negotiating with Goldman Sachs soon to potentially resolve a criminal probe, the Journal wrote.“We do anticipate getting into active discussions with Goldman, at this point, in the near future,” it cited Assistant Attorney General Brian Benczkowski as saying in an interview. He declined to comment on other aspects of the 1MDB case.Overhaul EffortThe investigation of Deutsche Bank is emerging just as the lender makes its most dramatic effort yet to overhaul its business after a decade in which it paid more than $18 billion in fines and other legal costs.In recent years, regulators and prosecutors have raided the bank’s headquarters, subpoenaed documents and grilled executives in dozens of probes on three continents. This week, the company said it will cut a fifth of its 91,000-person workforce and exit some business lines as it seeks to improve profitability.Leissner, Goldman’s former head of Southeast Asia, pleaded guilty last year to U.S. charges that he conspired to launder money and violated the Foreign Corrupt Practices Act. As part of the deal, he agreed to forfeit $43.7 million and admitted to bribing officials in Malaysia and the United Arab Emirates to get bond deals for Goldman Sachs.(Updates with details on Tan Boon-Kee in fourth paragraph)\--With assistance from Peter Blumberg, Edvard Pettersson and Tom Schoenberg.To contact the reporters on this story: Sonali Basak in New York at email@example.com;John Gittelsohn in Los Angeles at firstname.lastname@example.orgTo contact the editors responsible for this story: Michael J. Moore at email@example.com, David Scheer, Alan GoldsteinFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Deutsche Bank AG chief Christian Sewing had barely finished relaying the news about his huge restructuring to investors and the bank’s embattled employees when a fresh set of reputational woes surfaced.The U.S. Department of Justice is investigating Deutsche Bank as part of a broadened probe of Malaysia’s scandal-plagued 1MDB investment fund, a person with knowledge of the matter said. While authorities haven’t accused Deutsche Bank of wrongdoing, it’s an unwelcome development for Sewing, who has said that the firm has stabilized and that it’s past the bulk of its legal issues. In another blow to the bank’s image, it was revealed that Jeffrey Epstein had been a recent client of Deutsche Bank. The lender is said to have severed business ties with the financier earlier this year, just as U.S. authorities were preparing to charge him with operating a sex-trafficking ring of underage girls.Deutsche Bank has faced almost $18.3 billion in fines and legal settlements since the start of 2008. That’s the biggest bill for any European bank after Royal Bank of Scotland Group Plc’s $18.5 billion, according to calculations by Bloomberg. The German bank still has another 1.1 billion euros ($1.24 billion) set aside for future disputes and penalties.Here’s a look at some of the probes Deutsche Bank still faces, according to its latest filings and people familiar with the matter. The German lender says it’s cooperating with authorities on all of these issues.1MDBDoJ investigators, who have spent years examining Goldman Sachs Group Inc.’s lucrative dealings with the fund, are now taking a closer look at a former Goldman executive who later worked at Deutsche Bank, said the person familiar with the matter, who asked not to be identified discussing the confidential inquiry. The inquiry aims to determine whether Deutsche Bank might have violated foreign-corruption or anti-money-laundering laws as it helped 1MDB raise $1.2 billion in 2014, according to the Wall Street Journal. The German bank pointed to asset-forfeiture documents previously filed by the DoJ indicating that 1MDB misled Deutsche Bank during transactions.Danske Bank A/SThe German bank has said several authorities have asked it for information in what has become one of the world’s biggest money laundering scandals -- questionable funds at the Estonian arm of Denmark’s Danske Bank. But in a sign that Deutsche Bank doesn’t expect a penalty for how it may have handled any funds, it says it hasn’t established a financial provision or even a contingent liability for the matter.Panama PapersA high-profile raid last year embarrassed Sewing as media broadcast images of police cars outside the bank’s twin skyscrapers. Frankfurt prosecutors are probing whether Deutsche Bank helped set up offshore companies in tax havens and failed to report suspicions that money could have been obtained illegally. Deutsche Bank has said that it found no indication of misconduct by staff, and doesn’t list the matter in the legal risks section of its annual report.Sovereign BondsDid Deutsche Bank manipulate markets for sovereign, supranational and agency bonds? The bank says it has received inquiries from regulatory and law enforcement authorities and that it faces civil litigation. It recorded a provision after agreeing to one settlement, but hasn’t disclosed whether it has money set aside or contingent liabilities for others.U.S. TreasuriesWas there misconduct in the way Deutsche Bank handled auctions, trading and market activity related to Treasuries? The bank says it has received inquiries from regulatory and law enforcement authorities. Deutsche Bank hasn’t disclosed whether it has established a provision or a contingent liability.Mirror TradesIn 2012-14, Deutsche Bank’s money-laundering controls failed when clients moved billions of dollars out of Russia using equity trades in Moscow and London that offset one another. The DoJ and other authorities are looking into the matter. The bank has already paid about $670 million in fines to other agencies and has recorded a provision for the remaining investigation.Hiring PracticesDid Deutsche Bank comply with U.S. law when hiring staff referred by clients, potential clients and government officials, potentially to win business? The DoJ and Securities and Exchange Commission are among authorities that are taking an interest, according to the bank, which says it has recorded a provision for some of the investigations. JPMorgan Chase & Co. has paid a fine to resolve similar inquiries.Currency TradingDid Deutsche Bank manipulate foreign exchange markets? The company has already paid more than $340 million in fines to authorities and says it continues to face investigations by regulatory agencies. The bank wasn’t part of group settlements with regulators and its fines were lower than those of several other banks. Deutsche Bank also faces civil litigation, but hasn’t disclosed whether it has money set aside for these matters.Libor (and Euribor and Tibor)Is there even more damage to come from rigging-scandal-plagued benchmark lending rates? Deutsche Bank has already paid more than $3.5 billion in fines to other authorities, including the largest settlement by any bank so far in the matter. It says it continues to face investigations by regulatory agencies, but hasn’t disclosed whether it has made provisions. Deutsche Bank also faces civil litigation.U.S. Mortgage BondsEven after a $7.2 billion settlement with the DoJ in 2017, Deutsche Bank has yet to conclude its role in the industrywide probes on bonds blamed for exacerbating the financial crisis. The lender says it has received subpoenas and requests for information from regulators and government entities. The bank has recorded provisions for some of the investigations. The bank also faces civil litigation and has set aside money for some of the cases.(Updates with Epstein reference in second paragraph.)To contact the reporter on this story: Nicholas Comfort in Frankfurt at firstname.lastname@example.orgTo contact the editors responsible for this story: Dale Crofts at email@example.com, Keith CampbellFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Job cuts and restructuring announced by Deutsche Bank AG this week risk making it harder for the German lender to claw back market share at its surviving Asian units.Over the past five years, Deutsche Bank has fallen down the rankings for Asian debt capital markets and wealth management, while it has lost the top spot to rivals in fixed-income, currencies and commodities trading. Despite these slips, the businesses contributed to a record profit for the firm in the first quarter of 2019. But retrenchments in equities, research and investment banking could make it hard to maintain that performance.“If I’m with Deutsche Bank and I’m a good performer, if I get an offer from some other firm that can better support my work with research, a global franchise, stronger flow of investment banking deals, I will probably go there,” said Sanjay Jain, head of financials at Aletheia Capital Ltd., one of Asia’s biggest independent investment-research firms.The risk is that an exodus of Asian employees would break crucial business links and test the firm’s resolve to stay “absolutely committed” to the region. Even before this week’s cull, several senior credit traders had left Deutsche Bank last year for regional competitors such as Standard Chartered Plc.Deutsche Bank saw its wealth management assets in Asia outside of China fall 4.6% in 2018 from the previous year, even though it boosted the number of relationship managers by 12%, data from Asian Private Banker show.Assets under management at the bank’s wealth business in emerging markets, including Asia, rose 10% in the first quarter of 2019 from a year earlier, a Deutsche Bank spokeswoman said by email. Revenue grew by double digits last year at businesses including the private banking unit, as well as Deutsche Bank’s key markets of China and India, she said.Deutsche Bank is also facing stiffer competition from Chinese and Indian brokerages in capital markets that value knowledge of local languages and customs, and have entrenched ties with the nations’ state-run or family-owned businesses.Its pullback from Asian equities means it could lose market share to Chinese rivals, said Sharnie Wong, an analyst at Bloomberg Intelligence. Stock coverage is vital, due to growing inclusion of Chinese shares in global indexes.“Any impact from the recent changes in the investment bank is expected to be largely manageable, partly because the areas that provide the kind of services our clients use will be relatively less affected,” Deutsche Bank said.The firm cannot be complacent about debt capital markets either. Deutsche Bank ranked third for underwriting of Asia ex-Japan bonds denominated in dollars, euro and yen as recently as 2015. But it’s currently in ninth place this year, and was No. 11 in 2018. To be sure, the bank’s ranking in the high-yield G3 currency bond underwriting league tables is higher: third so far in 2019, up from eighth in the whole of last year.Deutsche Bank expects growth across all areas of fixed-income and currencies, the spokeswoman said, pointing to top or improving rankings in certain sub-sections of the market such as global credit trading or the Euromoney FX survey. Deutsche Bank had a record first quarter, Werner Steinmueller, APAC chief executive officer, said on Monday. He was referring to profit, the bank representative clarified on Thursday.The firm may look to use its relative strength in fixed-income and currencies trading to cater to multinationals’ needs for transactions and cash management, Bloomberg Opinion’s Nisha Gopalan wrote on Monday. While it lost the No. 1 ranking, Deutsche Bank is still among the top three in the Asian market, according to data from Coalition Group.China will continue to raise money and Deutsche Bank can feed these deals into its global network “in a way that can’t be matched by local Chinese competitors,” said Brock Silvers, managing director at China-based fund Kaiyuan Capital. “The cutbacks in the Asian equities business may hamper these efforts, but won’t stop them.”(Updates with Deutsche Bank wealth assets in sixth paragraph.)To contact the reporters on this story: Alfred Liu in Hong Kong at firstname.lastname@example.org;Denise Wee in Hong Kong at email@example.comTo contact the editors responsible for this story: Sam Mamudi at firstname.lastname@example.org, Jeanette Rodrigues, Katrina NicholasFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Deutsche Bank's work for 1MDB included helping to raise $1.2 billion (£959 million) in 2014 as concerns about the fund's management and financials had begun to circulate, the newspaper said, citing unidentified people familiar with the matter. Prosecutors are mainly looking into the role of Tan Boon-Kee, a colleague of a former Goldman Sachs Group Inc executive, Tim Leissner, who worked with him on 1MDB-related business, the paper said.
Deutsche Bank's work for 1MDB included helping to raise $1.2 billion in 2014 as concerns about the fund's management and financials had begun to circulate, the newspaper said, citing unidentified people familiar with the matter. Prosecutors are mainly looking into the role of Tan Boon-Kee, a colleague of a former Goldman Sachs Group Inc executive, Tim Leissner, who worked with him on 1MDB-related business, the paper said.