Bloomberg reports that Deutsche Bank’s announcement Thursday that earnings will suffer this quarter added to a cacophony of negative news over the past two weeks that’s increasing pressure on the bank’s new leadership.
Two days ago, police raided Deutsche Bank’s Frankfurt headquarters, arresting five employees, in a tax probe involving the sale of carbon-emission certificates in 2009 and 2010 that threatens to embroil co-Chief Executive Officer Juergen Fitschenand Chief Financial Officer Stefan Krause.
Fitschen and Anshu Jain, his co-CEO, are grappling with escalating regulatory probes and litigation stretching from the alleged rigging of interbank lending rates to claims the bank misrepresented products tied to U.S. mortgages. Resulting fines could cut into the company’s capital levels, the lowest of Europe’s four biggest investment banks.
'Deutsche Bank’s employees, right down to the doormen, must feel like a storm has descended on the company like a typhoon', said Klaus Fleischer, a professor of banking and finance at the University of Applied Sciences in Munich. 'It will be tough to repair the damage, even though Deutsche Bank has done a lot to bring about cultural change in the industry'.
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