BERLIN: Deutsche Bank sought to convince investors that it did not need a government bailout and had no plans for a capital increase on Monday morning, even as its shares fell to their lowest level in more than 20 years. Shares in Germany’s biggest bank sank by as much as 6.9 per cent to €10.63, the lowest since the lender began trading on the Xetra exchange in 1992, although it traded below that level in the early 1980s. The stock has fallen more than 50 per cent so far this year.
The sell-off spread to other European banks, with all lenders on the Euro Stoxx bank index in the red. Shares in Barclays slipped 2.7 per cent, while Santander lost 3.1 per cent. The index itself was down 1.8 per cent.The fall came after German magazine Focus reported that Chancellor Angela Merkel had ruled out providing any state aid for Deutsche ahead of elections in Germany next year.
The magazine also said that Ms Merkel had dismissed intervening on behalf of the bank in the US, where it has been asked by the Department of Justice for a record $14bn to settle allegations of mis-selling mortgage securities.
Deutsche has said it will not pay anywhere near the threatened fine, which is close to its total market capitalisation of $18bn, and on Monday, Jörg Eigendorf, the bank’s head of external communications, said that Deutsche’s chief executive, John Cryan, had “at no point” asked Ms Merkel to intervene in the stand-off with the DoJ.
He also insisted that the bank was working to solve its problems alone. “This question [ie. a government bailout] is not on our agenda: Deutsche Bank is determined to meet the challenges on its own,” he said. “The question of a capital increase is currently not on the agenda, we comply with all regulatory requirements.”
