USA TODAY US Edition
Deutsche Bank, Banco Santander shares fall
Fed had questioned capital plans of U.S. units
Shares of Deutsche Bank and Banco Santander fell in Thursday trading, the day after the Federal Reserve questioned capital plans of U.S. subsidiaries of the German banking giant and the global Spanish bank in annual financial stress test results.
Deutsche Bank shares closed nearly 2.7% lower in Deutsche Börse Xetra trading. Similarly, the bank’s stock closed down nearly 2.6% at $13.73 in U.S. trading.
Banco Santander shares closed down nearly 1.4% on the Madrid Stock Exchange. However, the bank’s stock closed fractionally higher at $3.92 in U.S. trading.
The Deutsche Bank decline came after the Federal Reserve on Thursday announced qualitative objections to the capital plan of Deutsche Bank Trust Corp., which consists of the U.S. transaction bank and wealth management business of Deutsche Bank.
While finding “some improvements in certain aspects of capital planning,” the Fed said “the firm overall continues to have material unresolved supervisory issues that critically undermine its capital planning process.”
Bill Woodley, Deputy CEO of Deutsche Bank Americas, said “the capital adequacy of Deutsche Bank Trust Corporation has never been in doubt.”
Also contributing to the Deutsche Bank stock decline was an assessment of Germany’s financial sector the International Monetary Fund issued Wednesday. The report said the bank “appears to be the most important net contributor to systemic risks.”
The Fed’s stress test findings separately cited Santander Holdings USA, indicating the U.S. subsidiary had “made progress in improving certain approaches to loss and revenue projection.”
However, the Fed also concluded “the firm continues to have material unresolved supervisory issues that critically undermine its capital planning process. “