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Credit lines reduced: Deutsche Bank builds up capital buffer in the Corona crisis – share very weak | message


At 13.3 percent, the core Tier 1 ratio (CET1) at the end of the second quarter was even higher than the 12.8 percent that Germany’s largest money house reported at the end of March, the bank said on Tuesday. By contrast, analysts had expected the equity buffer to decrease to 12.4 percent on average. Earnings in the second quarter were slightly above analysts’ estimates, the statement said. On average, financial experts had predicted that Deutsche Bank would achieve an adjusted profit of 135 million euros before taxes.

The reason for the thicker capital buffers is a lower credit volume. In the crisis, especially at the end of the quarter, customers had reduced more credit lines than expected, the bank said. At the beginning of the corona crisis, many companies had drawn liquidity to survive the lack of income. In addition, the volume of derivatives has decreased, for which the bank has to deposit a lot of capital.

Deutsche Bank shares very weak according to statements made in the second quarter

Deutsche Bank shares turned negative on Tuesday after statements about the second quarter and fell significantly at the end of the DAX. In the very friendly market environment, the papers lost 4.27 percent to EUR 8.50 at the close of trading on XETRA.

After the predominantly very strong quarterly figures from the US competition, the positive surprise on the part of Deutsche Bank turned out to be very moderate, said a stock exchange broker. He pointed out that only “slightly better” financial figures than analysts expect on average were promised.

Meanwhile, analyst Ingo Frommen from LBBW praised the core Tier 1 ratio of 13.3 percent as of June 30. “It would be significantly higher than the bank’s last expected rate of 12.5 percent and above the analyst’s expectation of 12.4 percent.” The expert Jernej Omahen from the US investment bank Goldman Sachs added that the earnings, which were slightly above the consensus estimate, added that market expectations had risen sharply in the past week.

Deutsche Bank shares have gained around 23 percent since the beginning of the year despite the Corona crisis, while the European banking sector lost almost 31 percent during this period. In the long term, however, Deutsche Bank securities continue to be among the biggest losers since the financial crisis at the end of the past decade – both under banking stocks and under all standard values.

Munich (Reuters) / FRANKFURT (dpa-AFX broker)

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