Shares of Deutsche Bank plummeted in early Friday trade following reports that a large number of hedge funds were trimming their exposure to the German financial giant. The bank has seen its borrowing costs steadily rise on the face of a potential $14 billion fine from the US Department of Justice. Deutsche Bank’s inability to raise enough cash to tide over the current crisis has fuelled speculation that Europe’s embattled banking sector could come under greater stress if the German government does not intervene. Analysts say the situation could get much worse for European banks as they grapple with eroding profits amid ECB’s negative interest rate regime. Already, German peer Commerzbank has announced plans to cut 9600 jobs and scrap the dividend in an effort to shore up its own finances. The DAX 30 index is trending back above 10,200 after briefly falling below the support level.
Deutsche Bank Revives the Ghost of Lehman Brothers
Daily Analysis - 30/09/2016