Deutsche Bank CFO says banks have had tough start to year

The Pak Banker - - COMPANIES/BOSS -

FRANK­FURT: Deutsche Bank's fi­nance chief said the first two months of 2016 were the worst start to a year for banks in gen­eral that he has seen in his bank­ing ca­reer.

"That has left its marks on our busi­ness," Mar­cus Schenck told Ger­man daily Bo­ersenZeitung in an in­ter­view pub­lished on Tues­day. "All op­er­a­tions which are close to cap­i­tal mar­kets are af­fected," he said, echo­ing re­marks from Chief Ex­ec­u­tive John Cryan last week. Deutsche Bank shares dropped 1.4 per­cent in early trad­ing, un­der­per­form­ing the Euro­pean banks sec­tor which was 0.9 per­cent lower.

Trad­ing and wealth man­age­ment op­er­a­tions have seen a sig­nif­i­cant drop from yearear­lier lev­els in the first two months, Schenck said. He also said that March was prov­ing to be much bet­ter. Schenck said dif­fi­cul­ties in find­ing coun­ter­par­ties also meant that Deutsche was un­able to off­load as many as­sets as planned as part of its strat­egy to cut its bal­ance sheet to com­ply with bank rules.

An­a­lysts from Gold­man Sachs, who on Tues­day cut Deutsche Bank's tar­get price, de­scribed the first quar­ter as "ex­tremely chal­leng­ing" for Euro­pean in­vest­ment banks, with ac­tiv­ity slow across all ma­jor rev­enue ar­eas.

"We now fore­cast that Euro­pean in­vest­ment bank rev­enues, on ag­gre­gate, will de­cline around 25 per­cent year-over-year," Gold­man Sachs said in a note. Rat­ings agency Moody's said late on Mon­day it had placed Deutsche Bank rat­ings on re­view for pos­si­ble down­grade.

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