DB - Deutsche Bank Aktiengesellschaft

NYSE - NYSE Delayed Price. Currency in USD
10.24
-0.43 (-4.03%)
At close: 4:00PM EST
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Previous Close10.67
Open10.58
Bid10.22 x 41800
Ask10.24 x 21500
Day's Range10.16 - 10.58
52 Week Range6.44 - 11.16
Volume11,021,804
Avg. Volume5,262,945
Market Cap21.142B
Beta (5Y Monthly)1.49
PE Ratio (TTM)N/A
EPS (TTM)-1.12
Earnings DateN/A
Forward Dividend & YieldN/A (N/A)
Ex-Dividend DateMay 18, 2017
1y Target Est6.51
  • Disagreement on Japan Evacuees; Cops Quarantined: Virus Update
    Bloomberg

    Disagreement on Japan Evacuees; Cops Quarantined: Virus Update

    (Bloomberg) -- The head of the World Health Organization called for nations around the globe to boost funding to fight the coronavirus while the outbreak is still mostly confined to China, and the airline industry forecast the first annual decline in global passenger demand in more than decade.Almost 60 police officers in Hong Kong are being quarantined after a colleague was infected. A report in the Washington Post described a dispute among U.S. officials over how to handle the evacuation of American patients from Japan.Hubei, the province at the center of the outbreak, reported a sharp drop in new cases, but another change in the way China diagnoses infections called into question the reliability of the data.The global death toll climbed to 2,129 and confirmed cases reached 75,730. Results from two early trials of treatments are expected in three weeks, the WHO said.Key DevelopmentsChina death toll rises to 2,118, with cases at 74,576Hubei adds 108 deaths, new cases up by 349; 1,209 dischargedInvestor anxiety rises as virus spreads outside ChinaJapan is becoming a new hotbed of casesClick VRUS on the terminal for news and data on the novel coronavirus and here for maps and charts. For analysis of the impact from Bloomberg Economics, click here.Disagreement Over Japan Patients Returned to U.S. (4:37 p.m. NY)Officials from the U.S. State Department and the Centers for Disease Control and Prevention disagreed over how to handle 14 people from a cruise ship who tested positive for the coronavirus while in the process of being repatriated to the U.S., according to the Washington Post.According to the report, CDC officials wanted to wait and have the people who had tested positive for the virus travel separately from about 300 people being sent back to the U.S. after a long stint on a cruise ship where the virus broke out. State Department officials disagreed and pushed for the patients to be included.The group was eventually flown back together, and the patients are being treated. Fifty-Nine Hong Kong Police Are Quarantined (1:24 p.m. NY)A group of 59 Hong Kong police officers are being quarantined after a fellow officer preliminarily tested positive for the virus, the city’s police force said in a statement on Facebook.Two days before being tested because he was feeling sick, the police officer had a meal with the 59 other officers at a restaurant in Hong Kong.“After learning of the incident, the police have immediately arranged that all colleagues immediately stop police work, avoid contact with the public, and go home to wait for quarantine arrangements,” the department said in the statement.The officer works with a riot team in Hong Kong’s Eastern Police District. Members of the riot control unit that the sick officer is part of aren’t being considered close contacts subject to quarantine, the department said.Drug-Trial Results Expected in Three Weeks, WHO Says (11:53 a.m. NY)Preliminary results from two clinical trials of treatments prioritized by the World Health Organization are expected in three weeks, Director-General Tedros Adhanom Ghebreyesus told reporters in Geneva Thursday.One of the trials is for a pill combining the anti-retroviral medicines lopinavir and ritonavir, a brand-name combination of which is sold by AbbVie Inc. The second trial is testing the experimental injected drug remdesivir, which is being developed by Gilead Sciences Inc.The trials are being run in China, where health officials are seeking ways to treat patients infected with the coronavirus using existing and experimental therapies.Airlines Expect First Global Traffic Drop Since 2009 (11:20 a.m. NY)The airline industry expects the first annual decline in global passenger demand in 11 years, after tallying up the initial impact of the thousands of flights canceled because of the coronavirus outbreak in China.The estimate shaves about 4.7 percentage points off of a passenger-growth forecast issued just two months ago, with almost all of the impact in the Asia-Pacific region, according to the International Air Transport Association. That may be conservative: The projections assume the loss of demand will be limited to markets linked to China.The drop would be the first overall decline since the financial crisis of 2008-2009. Global passenger demand is now seen contracting by 0.6% this year, compared with a December forecast for 4.1% growth, IATA said.WHO Says More Funding Needed to Fight Virus (10:50 a.m. NY)The head of the World Health Organization urged countries to boost funding to fight the spread of the novel coronavirus, saying that the response to its call for $675 million has been limited.“This is the time to attack the virus while it is manageable,” Director-General Tedros Adhanom Ghebreyesus said at a briefing in Geneva Thursday.Tedros said he’s surprised donations have been low and that countries aren’t treating the outbreak seriously enough. If the response isn’t strong now, the spread outside of China, which so far has been manageable, may become a wider threat, he said. “The virus is very dangerous, and it’s public enemy No. 1.”Foxconn, Norwegian Cruise Warns on Virus Impact (7:57 a.m. NY)Apple Inc. supplier Foxconn said the virus will impact 2020 revenue. Separately, Norwegian Cruise Line said the outbreak has caused it to cancel, modify or redeploy 40 Asia voyages, hurting projected earnings. Earlier, Air France-KLM slumped after it said the outbreak will wipe as much as $216 million from earnings and Qantas Airways Ltd. said it is slashing capacity on international flights in Asia.Lenovo Group Ltd. warned of “short-term volatility and challenges” because of disruptions at its suppliers, but said most of its plants had re-started operations and demand should rebound once the outbreak stabilizes. A.P. Moller-Maersk A/S is also positioning itself for a “strong rebound” based on an expectation that the fallout of the coronavirus on global trade may soon peak.Goldman Sees High Risk of Stock Correction (7:36 a.m. NY)Investors may be underestimating the negative impact of the coronavirus on corporate earnings, which poses a threat to the stock market rally, according to Goldman Sachs Group Inc.’s chief equity strategist.While coronavirus fears triggered a worldwide sell-off in January, those losses proved short-lived. Global equities are trading near record highs on optimism that the impact from the epidemic will be limited and China will step up support for its economy. Goldman’s Peter Oppenheimer cautioned against complacency.“While a sustained bear market does not look likely, a near-term correction is looking much more probable,” Oppenheimer, chief global equity strategist at Goldman, wrote in a note.China Urges More Production Resumption (6:56 a.m. NY)Local governments should seek to increase the rate of resumed production, China Central Television reported, citing Premier Li Keqiang.Deutsche Bank Singapore Employee Infected (6:42 a.m. NY)An employee at Deutsche Bank’s Singapore office, located at One Raffles Quay, has tested positive for the novel coronavirus. The bank said it deep cleaned the office, and completed contact tracing when first notified.Baselworld Watch Fair Still On (6:52 p.m. HK)The watch industry trade fair will go ahead as scheduled in late April. Organizers are in contact with health authorities and will take precautions including more frequent cleaning and disinfecting.Hubei Asks Firms Not to Resume Work Before March 11 (6:14 p.m. HK)Producers of drugs, medical equipment and protective items are not subject to the requirement, according to a statement from the Hubei provincial government.All Westerdam Crew Tested Negative for Coronavirus (6:13 p.m. HK)The Cambodian Ministry of Health confirmed all 747 crew on board the Westerdam ship have tested negative for the coronavirus, according to an emailed statement from Holland America Line which owns the vessel.Separately, Dream Cruises said it will suspend the Genting Dream Cruise from Singapore until March 27.China Considers Prolonging Electric-Car Subsidies (6:10 p.m. HK)Beijing may extend subsidies for electric-vehicle purchases beyond this year in an effort to revive sales in the world’s biggest market, people familiar with the matter said. The move could add to state aid being considered in wake of virus.Policy makers have been discussing the possibility after China’s first annual decline in sales of new energy vehicles, according to the people. Though the talks predate the emergence of the coronavirus as a global threat, the outbreak has piled more pressure on the auto industry by causing production halts and keeping people away from showrooms.Iran Reports Three Confirmed Cases After Two Deaths (5:18 p.m HK)Iran reported three more cases, a day after confirming two people had died from the outbreak. Two residents in Qom and one in Arak and have been hospitalized, state-run Iranian Students News Agency said, citing the country’s health ministry.China Says 29 Foreigners Infected (4:51 p.m. HK)Ten people were diagnosed in the Hubei province, Ding Xiangyang, deputy secretary-general at the State Council said. Two foreign nationals have died and 18 have been discharged.Indonesia Cuts Rates, Lowers Growth Forecast (4:30 p.m. HK)Indonesia’s central bank cut its benchmark interest rate after a three-month pause, and lowered the growth forecast as the spread of the coronavirus threatens the outlook for Southeast Asia’s biggest economy.South Korea Reports First Death (4:24 p.m. HK)South Korea reported its first fatality from the coronavirus as confirmed cases more than tripled within a day. The bulk of the increase is tied to a cluster from a religious sect and the outbreak has raised renewed concerns about the virus in the country after a lull in reported cases last week.South Korea’s Centers for Disease Control and Prevention said the number of domestic cases had reached 104. The CDC didn’t provide many details on the fatality but gave its location as a hospital near Daegu, one of the country’s biggest cities where infections have been found among members of the Temple of the Tabernacle of the Testimony, formerly known as Shincheonji Church of Jesus.The center said at least 28 new cases confirmed on Thursday involved those who attended church services with a person confirmed with the virus earlier this week. The pastor told JoongAng Ilbo newspaper in an interview that some 1,000 people attended the same service.Hubei Region Sells First Bonds Since Lockdown Began (3:46 p.m. HK)The Chinese province at the center of the outbreak sold about 10 billion yuan ($1.4 billion) of bonds in its first public fundraising effort since Beijing quarantined its capital.Japan Confirms Two From Cruise Died From Virus (2:14 p.m. HK)Japan confirmed two people who were on the cruise ship off Yokohama died from the novel coronavirus. The fatalities were a man and woman, both Japanese nationals in their 80s, who had existing medical conditions, NHK reported.The cruise ship has the most infections anywhere outside China, with more than 600 confirmed cases. Following 14 days of quarantine, Japan on Wednesday allowed passengers to start disembarking from the Diamond Princess liner, despite worries the country hasn’t done enough to prevent the spread of disease from the vessel.China Premier Says Don’t Halt Grain Planting (2:10 p.m. HK)Chinese Premier Li Keqiang told local governments to make sure farmers don’t miss the crucial grain planting season during a critical time for controlling the spread of coronavirus. Government officials are worried that the epidemic could spread to rural areas, where medical facilities are less developed than urban locales.“If we miss the planting season, we’ll be unable to make up for it, which will have an impact on the economic foundation and social stability of the whole year,” Li said in a release posted on the government’s website. “We are holding the rice bowl for 1.4 billion people in our own hands.”Fecal Transmission May Be Behind Virus’s Rapid Spread (12:37 p.m. HK)The novel coronavirus is shed in the feces of infected people, which may help explain why it’s spread so fast, according to Chinese researchers. The finding of live virus particles in stool specimens indicates a fecal-oral route for coronavirus, which may be why it’s caused outbreaks on cruise ships with an intensity often seen with gastro-causing norovirus, which also spreads along that pathway.Hong Kong Extends Work-From-Home for Civil Servants (12:23 p.m. HK)Hong Kong will extend work-from-home arrangements for civil servants to March 1 to reduce social contacts and the risk of spread of novel coronavirus in the community, according to an official statement. The government previously announced it would extend the work-from-home arrangement for civil servants to Feb. 23.U.S. Condemns China’s Expulsion of WSJ Reporters (11:04 a.m. HK)U.S. Secretary of State Mike Pompeo criticized China’s move to revoke the press credentials of three Wall Street Journal reporters over a controversial headline, a decision that comes as Beijing continues to lash out at countries that fault its handling of the deadly coronavirus outbreak.China Loan Rate Drops After Central Bank Eases Policy (9:48 a.m. HK)China’s banks lowered the benchmark borrowing costs for new corporate and household loans after Beijing slashed a range of policy rates this month to blunt the economic impact of a deadly virus outbreak. Earlier this month, the central bank cut the rates on its short-term funds and one-year loans to commercial lenders.Hubei Adds Fewer New Cases (7:50 a.m. HK)China’s Hubei province reported 349 additional confirmed cases for Feb. 19, a sharp drop from almost 1,700 the previous day. No explanation was given for the decline, although it came a day after national guidelines advised the province to only report two numbers in its overall count: confirmed cases and suspected cases. Prior to that, the province reported whether cases were confirmed via CT scans, or testing kits.China has faced questions about the transparency of its data as it repeatedly adjusts how it reports coronavirus cases. Last week, a shift in methods resulted in a surge of almost 15,000 new Hubei cases.(An earlier version of this story was corrected the story after an airline industry group revised its statement to say it would be first drop in travel since 2009, not 2003, in the 11:20 a.m. update)\--With assistance from Michelle Fay Cortez, Jason Gale, Peter Pae, Jihye Lee and Siddharth Dahiya.To contact Bloomberg News staff for this story: Thomas Mulier in Geneva at tmulier@bloomberg.netTo contact the editors responsible for this story: Adveith Nair at anair29@bloomberg.net;Jeff Sutherland at jsutherlan13@bloomberg.netFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • U.S. Dollar Nears a Critical Level That May Trigger a  Buying Spree
    Bloomberg

    U.S. Dollar Nears a Critical Level That May Trigger a  Buying Spree

    (Bloomberg) -- The spread of the coronavirus has suddenly sparked foreign-exchange traders into action.The dollar is emerging as the winner, heading toward a key psychological threshold that could supercharge a rally few saw coming at the start of the year. At the other end of the spectrum is the yen, which suffered its biggest two-day loss since 2017 after the threat of a Japanese recession sent hedge-fund buyers fleeing.The moves spurred gauges of volatility, which had been lying dormant near record lows in recent months.What’s going on in currency markets is “mad, bad and very ugly,” said London-based Kit Juckes, a strategist at Societe Generale SA. “It looks like huge capitulation by almost anyone who isn’t a dollar bull.”The greenback is outperforming virtually everything so far this year, confounding expectations that it would weaken following a trade deal between Washington and Beijing. The U.S. dollar index -- a widely-watched gauge of the currency versus its major peers -- has surged this week toward 100, which hasn’t been breached in nearly three years.It’s the level that capped the dollar twice in 2015 and effectively offered support during the first quarter of 2017 before finally giving in, heralding the greenback’s sharp decline that followed.“The 100 level is a big deal,” said Neil Jones, head of foreign-exchange sales to financial institutions at Mizuho Bank Ltd. “A number of buy signals will kick into play, it will set the alarm bells off.”There’s more good news for dollar bulls. The index’s moving averages are close to forming a so-called golden cross, when its 50-day measure rises above its 200-day equivalent. It would be the first time since 2018 and a sign to some traders of more gains to come. The pattern formed 13 times since the turn of the century, heralding average gains of about 2.5% in 40 days.Topsy TurvyWhile the dollar revels in its traditional role as a haven, the ferocity of the moves have turned other well-known paradigms on their head.The yen, which has long served as safe harbor from threats ranging from the Greek crisis to the U.S.-China trade war, has suddenly found its power drained. The coronavirus threatens to further weigh on a struggling economy, which analysts forecast will shrink an annualized 0.25% this quarter following a 6.3% contraction in the previous three months. Some options traders are betting the currency will weaken to 120 per dollar, from 111.96 currently.“A sharp slowing in tourism from China will have an important negative effect on the Japanese balance of payments,” said George Saravelos, a strategist at Deutsche Bank AG, which recommends investors stay long the dollar. “This is idiosyncratically negative for the yen, which no longer runs a goods surplus.”Market MovesWhile only the Swiss franc could match the greenback among major currencies on Thursday, rising to the highest level versus the euro in nearly five years, other haven assets also rallied, including U.S. Treasuries and gold, which touched the highest since 2013.Elsewhere, the pound slumped to lows last seen in November despite strong U.K. economic data, and emerging markets were not spared, with the won among the biggest losers after South Korea reported its first coronavirus fatality.Other Asian currencies slumped as contagion fears continued. The Singapore dollar slid to the lowest in almost three years on Thursday. The yuan retreated and the Australian dollar, which is seen as a proxy to the Chinese currency, slid to an 11-year low.“The emotional see-saw continues,” said Mark McCormick, global head of FX strategy at TD Securities.\--With assistance from Vassilis Karamanis and Jack Pitcher.To contact the reporter on this story: John Ainger in London at jainger@bloomberg.netTo contact the editors responsible for this story: Dana El Baltaji at delbaltaji@bloomberg.net, Neil ChatterjeeFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Deutsche Bank Boosts Loans to Cash-Strapped Tycoons in India
    Bloomberg

    Deutsche Bank Boosts Loans to Cash-Strapped Tycoons in India

    (Bloomberg) -- India’s shadow banking crisis and revitalized bankruptcy process are creating new opportunities for Deutsche Bank AG as it steps up lending to cash-strapped tycoons and for purchases of distressed assets.The German lender is seeing three times the volume of financing deals compared with 2018, when the shadow banking problems erupted, according to Rahul Chawla, the head of global credit trading at Deutsche Bank’s India unit. He declined to provide specific numbers, but said the bank has helped deploy “a couple of billion” euros to Indian structured finance deals.For Deutsche Bank, “this is a very, very high level of commitment,” Chawla said in an interview. He expects to grow the size of his book by another 30% in the next two years.Goldman Sachs Group Inc. and Apollo Global Management Inc. are among the other global firms to have spotted similar opportunities in India’s bad-debt woes, which have been magnified by the shadow banking crisis that erupted in 2018 with the default of a major infrastructure lender. As the non-bank finance firms have retreated, Indian companies have been struggling to obtain credit, curbing wider economic growth.Asian distressed debt is one of the few growth areas at Deutsche Bank as Chief Executive Officer Christian Sewing pursues a deep restructuring that involves the loss of 18,000 jobs worldwide, or roughly a fifth of total headcount.Chawla said one element of Deutsche Bank’s push in India is lending to business tycoons against their equity holdings. Before 2018, that business was dominated by short-term funding from shadow banks and mutual funds, which have since retreated.“Earlier, borrowers in India were demanding their terms on everything from the size of the loan to pricing, and we were just one in the beauty parade,” said Chawla. “The balance then tilted, with borrowers seeking loans at prices which reward the risks lenders are taking,” he added, noting that business owners are seeking more longer-term funding since the crisis.Chawla declined to mention specific transactions. However, the Economic Times newspaper reported last month that Deutsche Bank loaned $200 million to the Mistry family against their stakes in Tata Sons, to ease the tight liquidity conditions at Cyrus Mistry’s Shapoorji Pallonji Group.As well as loans to company founders, Deutsche Bank India offers credit to commercial real estate, private equity firms and for one-time debt settlements by delinquent companies. The lender is also active in trading and providing funds for distressed debt purchases.Bad loans at Indian banks are expected to continue rising, Credit Suisse Group AG analyst Ashish Gupta wrote in a note this week. They increased in the latter part of 2019, partly as a result of the spreading shadow bank crisis.A court ruling last year should help Deutsche Bank’s credit trading business in India, because it will likely stimulate more overseas interest by reassuring investors that they won’t lose priority in terms of repayment, Chawla said.India has seen slow progress since creating a bankruptcy court in 2016 to get to grips with the bad loan crisis. Only 17% of cases admitted to the court had produced a resolution plan as of December, according to data published by the insolvency board.However, some of the logjams was broken with the Supreme Court decision in November to clear the way for ArcelorMittal SA’s $5.9 billion takeover of Essar Steel India Ltd. The court allowed Arcelor to pay creditors and scrapped a bankruptcy appellate tribunal’s order that gave secured and unsecured lenders equal rights over the proceeds.After the judgment, “people now know we can take a call on the underlying credit. I don’t have to worry about where I stay in the structure,” Chawla said.Deutsche Bank holds 28.3 billion rupees ($396 million) of Essar Steel loans, purchased from IDBI Bank Ltd. and Bank of Baroda, according to filings made by the steel firm’s court-appointed bankruptcy administrator.Read about a Deutsche Bank bid for an ailing power project’s debtAmong its other distressed asset plans, Deutsche Bank has been seeking to purchase bad loans extended to Jindal India Thermal, GVK’s power plant in Punjab, and to Coastal Energen, people familiar with the matter have said. And the bank has almost doubled the debt it holds of real-estate focused shadow lender Altico Capital India Ltd. in the last few months.However, a rule that requires foreigners to go through a so-called asset reconstruction company for out-of-court bankruptcies can increase the cost and timescale of such deals, Chawla said.Chawla, who rejoined Deutsche Bank for a third stint in 2014, said he added three members to his team last year, bringing the total to 11.(Updates with purchases of Altico debt in 16th paragraph)\--With assistance from Anto Antony.To contact the reporters on this story: Suvashree Ghosh in Mumbai at sghosh186@bloomberg.net;Bijou George in Mumbai at bgeorge66@bloomberg.netTo contact the editors responsible for this story: Marcus Wright at mwright115@bloomberg.net, Andrew MonahanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    R.I.P. HNA, and the $143 Billion Empire You Built

    (Bloomberg Opinion) -- The house of HNA Group Co. may be no more, bringing an end to the dramatic rise and fall of one of the biggest buyers of global assets in recent years. It was about time.The Chinese government is planning to take over the airline-to-insurance-to-property conglomerate that splashed out over $40 billion in recent years to buy assets including stakes in Hilton Worldwide Holdings Inc. and Deutsche Bank AG and airplane lessor Avolon Holdings Ltd., Bloomberg News reported citing people familiar with the plans. A government seizure would mark the final step in an unwinding of the closely held and debt-encumbered behemoth that began more than two years ago.  In theory, Beijing was already running the show behind the scenes. In early 2018, as Anbang Insurance Group Co. (another binge-buyer that scooped up assets like New York’s Waldorf Astoria Hotel) was being taken over by the Chinese government, HNA was extended over $3 billion of credit lines by large state-owned lenders to keep going. Since then, on Beijing’s directive, it has sold off assets and attempted to retreat to its core airline-related business. Despite state support, HNA has still been late to make payments on bonds and unable to effectively run the sprawling businesses it bought.An official takeover would mean ownership changes at its foreign affiliates and subsidiaries. Would Ingram Micro Inc., the Irvine, California-based electronics distributor HNA bought in 2016, effectively become a Chinese state-owned enterprise? And if it did, would the company then have to go back to the Committee on Foreign Investments in the U.S. for approval?Under its existing agreement with CFIUS, Ingram Micro is required to operate as a standalone company, and is subject to annual audits of its compliance with certain operating and security agreements, according to Moody’s Investors Service. The company’s board composition is governed by an agreement with CFIUS and the U.S. Defense Department. Another subsidiary, Swissport Group Sarl, a ground handler, serves over 300 airports and millions of metric tons of cargo through over 100 warehouses globally. HNA representatives comprise a majority of the board. If the government officially takes control of HNA, those relationships will get more complicated. Just this week, the U.S. State Department designated five Chinese state-owned media outlets as foreign missions, increasing their reporting requirements around property and personnel. Waltzing onto foreign boards or owning overseas real estate isn’t as easy for Chinese entities as it once was.It also makes sense that Beijing would act now, in the teeth of the coronavirus epidemic.There’s no doubt that with the outbreak all but halting the real economy, hard-up borrowers are coming to the fore. Analysts had long seen HNA’s indebtedness as a significant risk to the financial system. To fund the borrowing spree that fueled its risk, the company spun a complex web of debt between subsidiaries and affiliates, using its units as collateral at times to take on yet more debt.Now, Beijing is  opening the spigots and relaxing bad loan limits to encourage banks to lend more freely and keep the economy ticking over. In this emergency environment, the ongoing risk of a collapse in HNA’s enormous net debt pile — worth $69 billion at the end of June, bigger than the borrowings of PetroChina Co. or Walmart Inc. — isn’t helping. You’re less likely to extend credit to a struggling business if you think your existing loan book might turn bad.It’s never easy to undo the excess of an M&A binge, and HNA’s large and labyrinthine balance sheet has meant even its wave of selloffs has barely moved the needle. While total assets have fallen by about $46.53 billion, to $142.8 billion, since their peak at the end of 2017, net debt is actually marginally up, making it increasingly difficult for HNA to service its borrowings. Affiliates and subsidiaries like Ingram Micro and Swissport have already distanced themselves, placing clauses in debt agreements that protect their cash flows. Throughout HNA's history, operating income has only occasionally run ahead of interest payments.To the extent that management has been able to keep these plates spinning at all, it's likely to have depended heavily in recent months on the way that HNA's investments in logistics, air transport, catering and retail have given it a presence throughout the sinews of China's economy, and the world’s. The coronavirus represents a critical blow to that proposition. China's aviation market has shrunk from the world's third-biggest to 25th place because of the infection. Hotels and shopping malls are empty. Cash is barely flowing.Two years on, Beijing is still trying to shed the assets of Anbang, now renamed Dajia Insurance. Officially unwinding the House of HNA will prove a much hairier task. But China may have no other options left.To contact the authors of this story: Anjani Trivedi at atrivedi39@bloomberg.netDavid Fickling at dfickling@bloomberg.netTo contact the editor responsible for this story: Rachel Rosenthal at rrosenthal21@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Anjani Trivedi is a Bloomberg Opinion columnist covering industrial companies in Asia. She previously worked for the Wall Street Journal. David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Citi, Deutsche start talks to sell $9 billion Dubai port company debt - sources
    Reuters

    Citi, Deutsche start talks to sell $9 billion Dubai port company debt - sources

    Citi and Deutsche Bank have started talks with other banks to sell roughly $9 billion in debt Dubai raised to take full control of DP World and refinance borrowings of Dubai World, sources familiar with the matter said on Wednesday. Dubai announced this week one of its state companies, Port and Free Zone World (PFZW), part of state investment vehicle Dubai World, aims to buy publicly listed shares of port operator DP World in a deal with a $13.9 billion valuation which will end up adding billions of dollars of debt to DP World's books. Citi and Deutsche Bank have underwritten roughly $9 billion of debt for the transaction and have started discussions with other lenders to decrease their exposure by distributing the debt, the sources said.

  • Citi, Deutsche start talks to sell $9 billion Dubai port company debt: sources
    Reuters

    Citi, Deutsche start talks to sell $9 billion Dubai port company debt: sources

    Citi and Deutsche Bank have started talks with other banks to sell roughly $9 billion in debt Dubai raised to take full control of DP World and refinance borrowings of Dubai World, sources familiar with the matter said on Wednesday. Dubai announced this week one of its state companies, Port and Free Zone World (PFZW), part of state investment vehicle Dubai World, aims to buy publicly listed shares of port operator DP World in a deal with a $13.9 billion valuation which will end up adding billions of dollars of debt to DP World's books. Citi and Deutsche Bank have underwritten roughly $9 billion of debt for the transaction and have started discussions with other lenders to decrease their exposure by distributing the debt, the sources said.

  • A Counter-Revolution Is Brewing in the U.K. and Europe
    Bloomberg

    A Counter-Revolution Is Brewing in the U.K. and Europe

    (Bloomberg Opinion) -- Behind the headlines about Brexit, a counter-revolution has quietly occurred in Britain in recent years. Its reverberations seemed certain to reach beyond the English Channel when last week the guillotine unexpectedly came down on Sajid Javid, the Chancellor of the British Exchequer.Javid, a devotee of the libertarian philosopher Ayn Rand and alumnus of Deutsche Bank, was edged out of Boris Johnson’s cabinet largely because he seemed too much a foot soldier of the ideological revolution that occurred in the 1980s in, first, Britain, and then, the United States.In that upheaval, the hyper-individualist free-marketeering of Margaret Thatcher and Ronald Reagan became dominant across the West. Thatcher aimed to “roll back the frontiers of the state.” Her ideological kin Ronald Reagan claimed that “government is not the solution to our problem, government is the problem.”In this view, the primary, if not the only, legitimate economic role of the government is to guarantee price stability rather than to intervene repeatedly to stem inequality and protect the weakest members of the population. Today, however, many citizens buffeted by global economic headwinds have come to see government yet again as a necessary player in the national economy.Javid is actually the latest casualty of the counter-revolutionary urge to overthrow obsolete pieties. The much bigger victims have been left-leaning parties across Europe, such as the Labour Party, the creator of Britain’s welfare state.Rebranded as New Labour under Tony Blair, it embraced Thatcherism — to the point where Thatcher identified Blair as her heir. During its 13 years in power, New Labour pushed through Thatcher-style deregulation and privatization, often disguising it through “public-private partnerships.”Failing to check de-industrialization, or rising social inequality, New Labour started to lose the party’s traditional working-class base in the manufacturing and mining districts of North England.Claiming to be Blair’s “true heir,” the Tory Prime Minister David Cameron, together with his Chancellor of Exchequer George Osborne, more aggressively advanced policies of “austerity” that further shrunk the remnants of the welfare state.The eventual outcome of Thatcherism on steroids was Brexit: a furious rejection by Britain’s working class of a long ideological status quo that seemed to benefit only a rich metropolitan minority.An early beneficiary of the anti-establishment mood was Jeremy Corbyn, who, in elections held one year after the Brexit referendum, dramatically increased his party’s vote share.Corbyn belonged to the marginalized left wing of the Labour Party, which had always seen the European Union (EU) as an enforcer of free-market fundamentalism, drastically constraining the British state’s ability to intervene in the economy. Accepting that Brexit had to get done, Corbyn offered in his popular election manifesto of 2017 a bonanza of spending promises. The manifesto was pathbreaking not only because it broke with the Thatcherite orthodoxy of non-intervention that for decades had prevailed inside the Labour Party.It was extraordinary also because the Conservative party, traditionally representatives of big business and the landed aristocracy, rushed to imitate Corbyn’s rhetoric, and to disown Thatcherism, claiming in own manifesto that “we do not believe in untrammeled free markets” and that “we reject the cult of selfish individualism.”“She has even adopted,” the Economist complained of the then-British Prime Minister Theresa May, “Labour’s ‘Marxist’ policy of energy-price caps.”In last year’s elections, the Conservative Party under Johnson competed even more fiercely with Labour to offer spending plans (much to the despair of orthodox economists and balanced-budget diehards).Johnson carefully distanced himself from his posh Tory pals, such pro-EU architects of austerity as Cameron and Osborne. He promised to use Brexit to re-engineer British laws in favor of British people. He even abandoned an earlier promise to cut corporation tax from 19% to 17%.Johnson, closely identified all his life with Tory free-marketeers, was responding to an altered public mood. According to a recent British Social Attitudes survey, 60 percent support more government spending.As it turned out, Johnson’s gamble succeeded. While the London-based leadership of the Labour party strove futilely for a second referendum on Brexit, many of its lifelong voters in the Northern England lent their support to a party that seemed more capable of extracting Britain from the EU and turning on the spending taps. Johnson is moving fast to please his new and potentially fickle constituency, nationalizing Northern Rail and increasing public spending. Sajid Javid, with his tattered copy of The Fountainhead, clearly stood in his boss’s (and neighbor’s) way, insisting that Britain should run a balanced budget by 2023. Javid’s replacement, Rishi Sunak, a hurriedly promoted Johnson loyalist, has no such constricting goal. As a political insider told the Financial Times about the new occupants of Downing Street: “It wasn’t a question of what they wanted to spend more money on; it was more a question of whether there was anything they didn’t want to spend more money on.” Johnson is, of course, an opportunist; and his actual ability to spend, already limited, may shrink even more by the time Brexit gets done. Moreover, he has barely started on his impossible task: triangulating the clashing demands of rich Tory grandees and North England’s immiserated working class. Nevertheless, the political alignments and re-alignments of the last three decades are now in plain sight.During the ideological hegemony of Reagan and Thatcher, left-leaning parties with electoral bases among working classes moved right — or, to the “center,” in their preferred euphemism.One unexpected outcome of this shift is that, today, they appear complicit in extensive social and economic breakdown. Worse: Their founding ideas about beneficent government, which they have steadily discarded since the 1980’s, are being stolen by carpetbaggers and the far-right.Indeed, Boris Johnson’s success in the UK could be paralleled by Marine Le Pen in France.Presidential elections are due in two years, and Le Pen, pitted against a weakened Emmanuel Macron (hailed early and fatefully in his tenure as the “French Blair”) is surging on the back of her promise to deepen the activist role of the state in the national economy.France may witness in 2022 what has already occurred in Britain: a counter-revolution that sends both free-marketeers and self-proclaimed “centrists” to the guillotine.To contact the author of this story: Pankaj Mishra at pmishra24@bloomberg.netTo contact the editor responsible for this story: James Gibney at jgibney5@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Pankaj Mishra is a Bloomberg Opinion columnist. His books include “Age of Anger: A History of the Present,” “From the Ruins of Empire: The Intellectuals Who Remade Asia,” and “Temptations of the West: How to Be Modern in India, Pakistan, Tibet and Beyond.” For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Brussels Edition: Finding the Off Switch
    Bloomberg

    Brussels Edition: Finding the Off Switch

    (Bloomberg) -- Welcome to the Brussels Edition, Bloomberg’s daily briefing on what matters most in the heart of the European Union. There’s a little something for everyone in a bouquet of measures on artificial intelligence and other digital policies — including facial recognition — to be unveiled today by the European Commission — part of an effort to compete with the U.S. and China’s technological might. That doesn’t mean everyone will be happy, though. Big tech platforms will bear the brunt of plans to explore legislation for so-called gate-keepers, new rules for AI, and a call to make data centers carbon neutral by 2030. It’s not all about curbs. The EU will also announce plans to loosen rules to allow businesses to share data, an effort it hopes could also boost innovation in the bloc. What’s HappeningBudget Pain | Along with the usual files and spreadsheets, EU leaders traveling to Brussels this week to thrash out the bloc’s seven-year budget are being advised to bring plenty of clean shirts. Failure to nail down the trillion-euro plan is still the most likely outcome, while diplomats fear talks could drag on through the weekend.Watch Out | Just when you thought the battle to succeed Angela Merkel couldn’t get any spicier than having a her nemesis throw his hat into the ring, another one of the chancellor’s antagonists unexpectedly announced his candidacy just as the outgoing head of her Christian Democratic Union was due to begin talks with the three front-runners.Spanish Tractors | Spanish Prime Minister Pedro Sanchez is facing his first bout of protests after winning backing to form a coalition last month. Tens of thousands of farmers have demonstrated in recent days with a growing list of complaints, from plunging prices to the impact of Brexit. Here’s why it’s more than just a Spanish problem.Big Spender | Portugal’s economy outpaced the broader euro area in 2019, and the government doesn’t want it to stop. After notching up six straight years of growth since an international bailout, Economy Minister Pedro Siza Vieira plans to spend 10 billion euros on infrastructure projects, he told us in an interview.Battery Charge | The EU’s push to challenge Asia’s dominance in batteries for electric cars is starting to take shape. It’s a critical effort to defend the bloc’s auto industry, but it might be too little, too late. Here’s more. In Case You Missed ItTrade Stats | After Brexit shattered 50 years of trade policy in Britain, Boris Johnson has to try and find a way to glue the pieces back together, especially with the EU. Here are the key numbers and charts that will dictate the U.K.’s priorities. Meanwhile, EU trade chief Phil Hogan said any damage done to the British economy will be the U.K.’s fault alone.Bulgarian Tycoon | Bulgaria’s Justice Ministry sent an extradition request to the United Arab Emirates, where Vasil Bozhkov, one of the Balkan country’s richest men, was detained last month. On top of organized crime charges, prosecutors added new allegations that accuse the gambling tycoon of illegally holding objects of cultural value.Climate Cutoff | Pressure is mounting on Poland to either get on board with EU plans to become carbon neutral in the next three decades or risk forfeiting billions of euros in aid. While the country supports the EU’s ambition, it’s proving to be the lone thorn in refusing to accept the mid-century deadline. Here’s why.Corona Fear | German investor confidence plunged below even the most pessimistic estimate on concern that the coronavirus outbreak in China will disrupt trade. Europe’s largest economy is already struggling with flatlining growth and a manufacturing recession that has lasted more than a year. Green Cities | Stockholm and Manchester are some of the cities that are leading the way in reaching their climate goals, while Oslo — with some of the most ambitious targets — has made little progress toward achieving them. It shows how urban centers, which produce about 70% of worldwide greenhouse-gas emissions, are diverging wildly in their attempts to battle climate change. Chart of the DayTurkey has until the end of the year to comply with EU demands on tax transparency, or risk being added to a list of countries that could face financial sanctions. The EU’s 27 finance ministers meeting in Brussels determined that Turkey currently doesn’t comply with the bloc’s requirements and gave Ankara until the end of the year to fall in line.Today’s AgendaAll times CET.3 p.m. Trade Commissioner Phil Hogan gives a presentation of commission’s legislative and non-legislative proposals and priorities in the field of common commercial policy Commission to announce proposals for regulating data and artificial intelligence, including facial recognition technologies EU tech and antitrust chief Margrethe Vestager delivers a speech on the digital package at an event organized by Centre of European Policy Studies in Brussels EU economy chief Paolo Gentiloni meets Deutsche Bank CEO Christian Sewing, CEO. Also meets Mark Carney, governor of the Bank of England European Parliament Committees on Internal Market and Consumer Protection and on Industry will debate on the Commission’s new initiatives in the digital sector with Internal Market Commissioner Thierry Breton\--With assistance from Joao Lima.To contact the authors of this story: John Ainger in Brussels at jainger@bloomberg.netNatalia Drozdiak in Brussels at ndrozdiak1@bloomberg.netTo contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net, Chris ReiterFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Walmart Must Prove Misstep Isn’t a Serious Stumble
    Bloomberg

    Walmart Must Prove Misstep Isn’t a Serious Stumble

    (Bloomberg Opinion) -- Walmart Inc. has been battling to take on Amazon.com Inc., but it was weakness in old-fashioned categories of retailing, not whizzy tech, that undermined its holiday performance and prompted it to come up short of expectations for this year.And that pressure’s not going away anytime soon, considering the continued onslaught from rivals that excel at back-to-basics shopkeeping, such as European discounters Aldi and Lidl, and the Amazon assault, which shows no sign of a let-up. The world’s biggest retailer needs to show that its impressive turnaround isn’t going off track.While Walmart’s U.S. grocery business — which the retailer has transformed into a bridgehead against Amazon —  held up, along with online sales, the company suffered the same fate as Target: weakness in toys, clothing and gaming. Consequently, U.S. same-store sales rose by 1.9% in the fourth quarter, compared with expectations of 2.4%.It’s a rare misstep. As my colleague Sarah Halzack has noted, Walmart has done a good job of leveraging its 4,800 U.S. stores to provide an asset that Amazon can’t match yet.But the battle isn’t slackening. Although Amazon hasn’t upended fresh food, it’s not giving up. It has signaled its continued intent by dropping the grocery delivery charge for Prime members in the U.S. and planning for a new chain of supermarkets to be introduced soon.But the behemoth isn’t the only rival Walmart needs to watch. It also faces an increasing threat from German discount retailers Aldi and Lidl, which are expanding aggressively in the U.S. Aldi, which has had an American presence for decades, plans to increase its store count from just less than 2,000 today to 2,500 by the end of 2022.Although Lidl got off to an uninspiring start when it launched in the U.S. in 2017, it is now opening supermarkets apace, helped by the acquisition of 27 Best Market stores, giving it a valuable foothold in New York and New Jersey.  Walmart has been responding by improving the quality of its fresh food, developing its private-label brands — a particular strength of the European discounters — and cutting prices, which are now getting closer to Aldi’s, according to analysts at Deutsche Bank. Even so, it can’t let its foot off of the price-cutting pedal. It made this mistake with its U.K. arm Asda, and the discounters undermined its low-price message and picked off its customers.With the weaker-than-expected holiday season, Walmart must show that it hasn’t run out of steam. It says it is working to address the issues behind the disappointing fourth quarter. It needs to learn lessons, and fast.And it must do so at the same time as it rebuilds its operating margin, which has been eroded by those price cuts as well as the investments in the future. Progress toward profitability in its e-commerce division will be crucial. Walmart expects U.S. online losses to be flat or down this year.Investors have tolerated the pressures on profitability from investment — the shares were up about 18% over the 12 months to Friday’s close —  because of the strong top-line gains. They trade on a forward price-to-earnings ratio of 22.5 times, almost a quarter above the average over the past five years of 18.1.But to maintain this historic premium, Walmart will have to demonstrate that its holiday sales stumble was a blip and that it can keep up its progress against both Amazon and its other, often forgotten foe, the European discounters.To contact the author of this story: Andrea Felsted at afelsted@bloomberg.netTo contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    At Last, Italy Tries a $5.3 Billion Bank Deal

    (Bloomberg Opinion) -- Italian banks embarking on a round of consolidation was always a matter of when, not if. Meager profitability, a fragmented industry and a desperate need for investment are obvious ingredients for M&A. Lenders have rid themselves of most of the bad loans that crippled Italy’s banks after the financial crisis, so dealmaking should be unhindered.Intesa Sanpaolo SpA’s surprise $5.3 billion offer for a smaller Italian rival in a four-way carve-up may not have been what investors had in mind. Intesa is already Italy’s biggest bank and its target, Unione di Banche Italiane SpA — the country’s fourth-largest — was seen as more of an acquirer of weaker rivals than a target.But the deal may provide the jolt the European industry needs. Almost a year has passed since the failed effort to combine Germany’s Deutsche Bank AG and Commerzbank AG through a more complex, risky deal. The completion of a simpler union could embolden chief executives elsewhere in the continent too.Intesa’s unsolicited all-stock bid, at a 25% premium to the closing price, would make it one of the biggest European banking mergers since the Lehman crisis. UBI, which hasn’t commented on the approach, was caught off guard. Just hours earlier in London, it presented its strategy as a standalone company.A deal would move Intesa into the group of top 10 European lenders, measured by operating income. Though UBI investors could argue for juicier terms, the strategic and financial rationale for a deal is compelling. The European Central Bank’s initial positive feedback on the merger should improve Intesa CEO Carlo Messina’s chances of persuading his UBI counterpart.A takeover would create a joint business with a market share of about 21% in loans and deposits, 23% in asset management and 19% in life insurance. To avert antitrust concerns, Intesa has agreed to sell as many as 500 branches to a regional lender and to dispose of insurance activities too. The banks have similar business models and the 5,000 anticipated job cuts are expected to be voluntary (3,400 job losses have already been announced by the banks). The deal would bring 510 million euros of cost savings and 220 million euros of revenue synergies, according to Intesa. The buyer is promising to pay a cash dividend of 0.2 euros per share for 2020, and higher from 2021, above current consensus estimates. To cover the deal’s cost, Intesa expects to benefit from about 2 billion euros of negative goodwill to help pay for integration expenses and a deeper clean-up of bad loans.Investors like what they’re hearing. A bond UBI sold five weeks ago has delivered an impressive 12% return, making it the best-performing bond in Europe this year. UBI shares rose as much as 29% on Tuesday, above the offer price; Intesa shares rose as much as 3.6%.Some investors had hoped that Intesa would make a bolder move to diversify its business away from Italy and to reduce its reliance on lending income. But support from the ECB for the UBI approach would at least show the regulator is willing to countenance much-needed M&A in Italy, and Europe.Messina’s unexpected move might inspire a broader consolidation. As sub-zero interest rates persist and economies sputter, European banks’ low profitability is unlikely to improve. Cross-border deals are still complicated by different national insolvency laws and the absence of a common European deposit-insurance scheme. At least Messina is doing something.To contact the author of this story: Elisa Martinuzzi at emartinuzzi@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Deutsche Bank’s Risky-Debt Decision Loses Bite Amid Overhaul
    Bloomberg

    Deutsche Bank’s Risky-Debt Decision Loses Bite Amid Overhaul

    (Bloomberg) -- Deutsche Bank AG may have defused a potential land mine in its still-fragile turnaround.A once-treacherous decision about whether to retire one of the bank’s riskiest bonds in April has almost become a nonevent amid signs of progress in the overhaul and overwhelming evidence of the lender’s ability to sell Additional Tier 1 notes in a red-hot market. The bank has also avoided much of the opacity that riled Banco Santander SA bondholders ahead of a similar AT1 call decision last year.“They’ve done everything right, particularly since this is an asset class that’s created so many problems for them in the past,” said Sebastiano Pirro, a portfolio manager at Algebris Investments. The upcoming AT1 call decision “won’t be a big deal either way,” he said. Pirro declined to comment on Algebris’s holdings.Potential market indifference about the call marks a sharp turnaround for the unprofitable lender, as its AT1s have been whipsawed for years by concerns about capital levels, coupon payments and the ability to sell new notes. It also reflects a focus on investor communication that has let the German lender sidestep the confusion and complaints triggered by Santander’s unprecedented skipped call.“I don’t think it matters hugely whether they call or not, as long as they don’t follow the same path as Santander,” said Filippo Alloatti, a senior credit analyst at Hermes Investment Management.Market regulations bar Deutsche Bank from indicating whether it will redeem the old AT1 before it issues an official call notice. The announcement can come as late as 25 days before the voluntary April 30 redemption date. If the $1.25 billion 6.25% bond is left outstanding, the coupon will reset to about 436 basis points over five-year swaps, which currently works out at about 5.7%.The bank has explained how it will decide whether to exercise the call, and made it clear that selling new AT1s doesn’t necessarily mean that old ones will be redeemed. It declined to comment on the call decision when contacted by Bloomberg News, including on whether it has received regulatory permission for a redemption.Step forwardOn Feb. 11, the bank bagged a bumper $14 billion order book as it sold a new $1.25 billion perpetual AT1, its first such offering since 2014. The sale extended a run of recent wins for Chief Executive Officer Christian Sewing, including a surge in fixed-income trading last quarter and a share-price boosting investment from U.S. fund manager Capital Group.“The AT1 issue is another step forward in the active, diligent balance sheet management we’ve been undertaking over the past three years,” Group Treasurer Dixit Joshi told Bloomberg News.Shares of the lender were little changed on Monday. They have jumped almost 50% this year.READ MORE: Deutsche Bank Trading Surge Gives Comfort Six Months Into RevampStill, the bank will pay a 6% coupon on the bond, suggesting investors needed a hefty incentive to take on the risk amid continued losses and falling revenue at key units. The yield, which is now about 5.7%, is the highest for any outstanding AT1, based on Bloomberg Barclays index data.Deutsche Bank’s bondholders may have drawn comfort from the relatively muted price reaction to better-rated Santander’s howl-inducing AT1 rollover last year. The price of the extended note quickly recovered, and the Spanish lender had no difficulties selling a new issue this year.“In Santander’s case, the problem wasn’t the extension, it was the communication -- and Deutsche Bank is super focused on this,” Pirro said.(Updates with stock price in 10th paragraph.)To contact the reporter on this story: Alice Gledhill in London at agledhill@bloomberg.netTo contact the editors responsible for this story: Hannah Benjamin at hbenjamin1@bloomberg.net, Neil Denslow, V. RamakrishnanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Financial Times

    Deutsche Bank faces departures over contractor pay cut

    Deutsche Bank is facing a rash of contractor departures in vital compliance areas such as anti-money laundering after angering its freelance workforce by demanding they take a 25 per cent pay cut in response to a change in UK tax law. As many as 50 out of 53 workers in Deutsche’s London-based “change-management” team specialising in global financial crime are considering leaving by the end of March, according to two people close to the situation. for assessing the employment status of any contractor they hire who uses a limited company, with they and their recruitment agencies held liable for any unpaid income tax and national insurance contributions if they wrongly classify workers as self-employed.

  • Reuters

    Australia investigator met other regulators before Citi, Deutsche charges

    An Australian investigator who helped bring criminal cartel charges against Citigroup Inc and Deutsche Bank AG told a court he met agents from another regulator in a cafe to discuss the matter but the talks were "high level" only. Citi, Deutsche, their client Australia and New Zealand Banking Group Ltd and several of their current and former executives are accused of forming an agreement during an A$2.5 billion ($1.7 billion) ANZ stock issue to withhold selling unwanted shares to prevent them from falling when they hit the market in 2015. In pre-trial hearings, lawyers for the banks and their staff have suggested witnesses for the Australian Competition and Consumer Commission (ACCC), which brought the charges in Australia's biggest white collar criminal case, relied on evidence that was tainted by outside influences and pressure from above.

  • Deutsche Bank Sells Dollar AT1 in Credit-Market Breakthrough
    Bloomberg

    Deutsche Bank Sells Dollar AT1 in Credit-Market Breakthrough

    (Bloomberg) -- Deutsche Bank AG sold its first Additional Tier 1 bond since 2014 after drawing a flood of orders, as signs of progress in a turnaround bolster the appeal of the high-coupon notes.The German lender priced the $1.25 billion perpetual note at 6%, versus an initial price target of about 6.75%, according to a person familiar with the matter, who asked not to be identified because they’re not authorized to speak about it. The bonds, callable in October 2025, have an expected B1 rating at Moody’s Investors Service, or four steps below investment grade.The bank received as much as $14 billion of orders for the notes, the riskiest type of bank debt, as Chief Executive Officer Christian Sewing starts to regain investor confidence by scaling back global expansion in a bid to end losses. The high demand and a price rise in secondary-market trading also reflect bond buyers’ willingness to buy into lower-rated deals amid wafer-thin global yields.The sale would have been “unthinkable” even just a few months ago, CreditSights analyst Simon Adamson wrote in a note Tuesday. A combination of favorable market conditions and improving sentiment toward Deutsche Bank has “changed the landscape,” he wrote.U.S. fund manager Capital Group also unveiled a stake in the lender last week, sending the bank’s shares rocketing. Deutsche Bank has cut costs and boosted capital buffers as Sewing pares unprofitable operations, sheds staff and refocuses more on Germany and Europe.Firing lineAdditional Tier 1 bonds are the first type of bank debt to take losses in a crisis. Industrywide, the notes have returned almost 5% already this year, based on a mixed-currency Bloomberg Barclays index, due to the lure of high coupons in a low-yield environment.The 6% yield on Deutsche Bank’s new AT1 compares with an average yield of 2.57% on U.S. high-grade corporate bonds and an average yield of about 4% for dollar AT1s, based on Bloomberg Barclays data. The new note traded at 100.5 cents, according to Trace pricing.“Investors don’t have to like the credit to buy this bond,” said Jakub Lichwa, a strategist at Royal Bank of Canada. “The current environment is highly supportive for bank debt.”Deutsche Bank’s outstanding $1.25 billion 6.25% AT1 has also climbed to near par on speculation the note will be redeemed following the new issuance. The old bond was as low as 91 cents as recently as last month on concerns that the bank would skip the first call date in April.Treasurer Dixit Joshi said Feb. 3 that analysts “should not draw any conclusion” about the bank’s plans to redeem old AT1s based on issuance plans.The bank isn’t obliged to call the old 6.25% AT1 in April. It could instead leave the bond outstanding and potentially redeem some legacy debt that is losing value as regulatory capital, according to Steve Hussey, head of financial institutions credit research at AllianceBernstein Holding LP.Deutsche Bank confirmed the AT1 sale in a statement. It acted as sole bookrunner on the deal.(Updates with orders, secondary-market trading in third paragraph)To contact the reporters on this story: Alice Gledhill in London at agledhill@bloomberg.net;Steven Arons in Frankfurt at sarons@bloomberg.netTo contact the editors responsible for this story: Hannah Benjamin at hbenjamin1@bloomberg.net, Neil Denslow, Dale CroftsFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Deutsche Bank Is Allowed Back Into the High-Risk Club
    Bloomberg

    Deutsche Bank Is Allowed Back Into the High-Risk Club

    (Bloomberg Opinion) -- Deutsche Bank AG is back — at least if its ability to sell the riskiest type of debt is a yardstick.After a six-year hiatus marked by a flirtation with collapse, billions of euros of losses, multiple management changes and its biggest restructuring in decades, Deutsche is going into the deep end of fixed-income risk: a benchmark perpetual bond (known as an AT1, or CoCo bond). Investors’ insatiable hunt for yield and the lender’s own green shoots of recovery have allowed the former basket case of European banking to tap a market that was all but off-limits for years. The German behemoth appears to be exiting intensive care, though a full recovery is not a given.So-called additional tier 1 regulatory capital bonds (CoCos) are an especially risky type of debt because the investor bears the losses if the bank fails. As such, it’s notable that Deutsche is self-assured enough to sell them — and people are happy to buy. The new issue announced on Tuesday saw initial talk of a 6.75% coupon reduced dramatically to 6% in the final pricing; the order book was 11 times higher than the $1.25 billion issue size.The big message here for investors is that Deutsche does not need to raise equity to fund itself anymore.Despite early doubts about the latest restructuring unveiled by Chief Executive Officer Christian Sewing in the summer, Deutsche has improved steadily over the past few months — albeit from a very low base. After hovering near record-low levels for much of 2019, its share price has risen 50% in the past two months. Capital Group, a $2 trillion fund manager, has shown its faith by taking a 3.1% stake.The bank’s de-risking has helped. After shrinking and shedding assets, Deutsche Bank has improved its capital buffers beyond expectations.Its credit spreads have narrowed substantially, with five-year senior credit default swap spreads dropping from 80 basis points in November to less than 50 basis points now. That is now in line with blue-chip banking rivals such as Goldman Sachs Group Inc., which should help Deutsche lower its funding costs.As it happens, Deutsche will probably issue much less net new debt this year as it repays funding taken from the European Central Bank. It helps that it doesn't really need the money being raised from the AT1 issue, as that will bolster its capital cushion further. It is well ahead of its regulatory requirements with a 30 billion-euro ($33 billion) buffer, according to Bloomberg Intelligence's Jeroen Julius.None of this is to say that Deutsche’s transformation is complete. The 150-year-old lender is cutting one-fifth of its workforce, exiting the trading of stocks and shrinking the balance sheet. After initially pinning the bank's future revenue growth on a tilt toward its corporate banking roots, Sewing has acknowledged that he’s counting on trading revenue to hit targets. Trading is not a business that can be counted on, as Deutsche reminded investors in its AT1 offer document. Not only are markets tough, the German giant’s franchise isn’t what it was. Still, the bond markets are prepared to take a punt on a form of debt where they carry the cost if things blow up. That’s a vote of confidence of sorts.To contact the authors of this story: Marcus Ashworth at mashworth4@bloomberg.netElisa Martinuzzi at emartinuzzi@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Marcus Ashworth is a Bloomberg Opinion columnist covering European markets. He spent three decades in the banking industry, most recently as chief markets strategist at Haitong Securities in London.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Reuters

    Australia investigator in bank cartel case says boss's comments pressured him

    An Australian investigator who helped bring criminal cartel charges against Citigroup Inc and Deutsche Bank AG told a court on Wednesday he felt "pressure" after his boss made public comments suggesting imminent prosecutions. The disclosure in a pre-trial hearing relates to a central plank of the defence in Australia's biggest white collar criminal case, over a controversial 2015 stock issue for Australia and New Zealand Banking Group: the banks' lawyers want to show investigators used tainted evidence and deviated from regular process due to pressure. The matter of Australia vs Citi, Deutsche, ANZ and several of their current and former executives is being closely watched by investment bankers around the world because it could have implications on the way they are allowed to run share sales.

  • Exclusive: Deutsche Bank taps U.S. tech companies for makeover - sources
    Reuters

    Exclusive: Deutsche Bank taps U.S. tech companies for makeover - sources

    Deutsche Bank has invited bids from Microsoft, Google and Amazon to overhaul the German bank's outdated and fragmented technology networks, people with knowledge of the matter said. The bank's approach to the U.S. tech companies, which has not been previously reported, is part of a 13 billion euro ($14.20 billion) technology investment Deutsche has planned up to 2022 as it restructures to recover from years of losses. Bernd Leukert, who recently joined Deutsche's board as chief technology officer from software group SAP, is overseeing the initiative.

  • Reuters

    CORRECTED-Japan's MUFG, Mizuho in London rehiring spree despite Brexit

    Japan's MUFG and Mizuho have hired a total of nearly 100 staff in London in the last 6 months, bolstering their trading and investment banking teams despite industry concerns over Brexit's impact on financial services in Britain. Mizuho has hired more than 25 senior bankers and traders, while MUFG has hired seven senior investment bankers, an aviation finance team from Germany's DVB Bank and dozens of back office risk and compliance staff, information from sources and internal bank memos seen by Reuters show.

  • Deutsche (DB) Plans to Offer Additional Tier 1 Securities
    Zacks

    Deutsche (DB) Plans to Offer Additional Tier 1 Securities

    Deutsche Bank (DB) expects to issue additional tier 1 securities with a denomination of nearly $200,000.

  • Reuters

    Australia investigator in Citi cartel case learned of concerns from rival agency

    An Australian investigator who helped bring criminal cartel charges against Citigroup Inc and Deutsche Bank AG said he first heard concerns about a stock issue they worked on from a rival regulator, but the agencies acted independently. The disclosure on Tuesday in a pre-trial court hearing relates to a central part of the defence against the country's biggest white collar criminal case: the investment banks want to show the evidence used to charge them was tainted by outside influences and departure from due process. The banks, their client Australia and New Zealand Banking Group and several current and former executives are charged with colluding during a 2015 stock issue for ANZ to withold unsold shares and keep the stock from falling.

  • Reuters

    PRESS DIGEST- Financial Times - Feb. 11

    Accountancy and business advisory firm BDO is being sued for up to 250 million pound for alleged negligence in its role as administrator to a skyscraper development project on London's South Bank. Deutsche Bank said on Monday it would issue at least $1 billion in Additional Tier 1 (AT1) securities as the bank manages its regulatory capital requirements.

  • Deutsche Bank to issue at least $1 billion in AT1 securities
    Reuters

    Deutsche Bank to issue at least $1 billion in AT1 securities

    LONDON/FRANKFURT (Reuters) - Deutsche Bank said on Monday it would issue at least $1 billion in Additional Tier 1 (AT1) securities as the bank manages its regulatory capital requirements. The decision was made by the management board and approved by a committee of the supervisory board, the German bank said. Deutsche Bank's decision to issue AT1 securities will soothe investor worries over an existing U.S. dollar contingent convertible (CoCo) instrument that is redeemable in April this year.