Deutsche Bank chief executive John Cryan said today the German lender has never had as safe a balance sheet in the past two decades and there is “no basis” for media speculation on clients leaving.
“Our bank has become object of heavy speculation – renewed rumours have sparked marked swings in shares,” Cryan said in a letter to staff. “Our job is that this distorted perception from outside doesn’t influence our business in a stronger way. There are some market forces, that want to weaken this confidence in us.”
Even the outcome of US litigation doesn’t justify the share decline, he said.
About 10 hedge funds that do business with the German lender have moved to reduce their financial exposure. The funds, a small subset of the more than 800 clients in the bank’s hedge fund business, have moved part of their listed derivatives holdings to other firms this week, according to an internal bank document seen by Bloomberg News. The hedge funds’ move highlights concern among some counterparties about doing business with Europe’s largest investment bank.
Deutsche Bank’s shares and debt have been under pressure after the US Justice Department this month requested $14 billion to settle an investigation into residential mortgage-backed securities. The bank has said it expects to negotiate that lower, as other Wall Street banks have.
The shares dropped as much as 9 per cent at one stage and were down almost 6 per cent to €10.25, a record low, in Frankfurt this morning. The German bank's troubles also affected other European bank shares, with Barclays down more than 3 per cent in London.