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Business

With few options, Deutsche could shrink in U.S.

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Opening sequence

Business

With few options, Deutsche could shrink in U.S.

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COMING UP:With few options, Deutsche could shrink in U.S.

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Transcript

00:00:01
>> Plagues by a massive fine and at slumping its share price, Deutsche Bank needs to move quickly if it's to restore investor confidence. But the German lenders room for maneuver is limited according Reuter’s Senior Correspondent Ed Taylor in Frankfurt.>> Deutsche Bank appeared to be doing fine until the Department of Justice in America demanded a fine of up to $14 billion to pay for misselling of mortgage backed securities.
00:00:25
Deutsche Bank currently doesn't have a very good equity story with which it can approach investors to persuade them to invest in the stock, that's the main problem they have. If the Department of Justice fine is too big however, they may be forced to raise some money as an emergency step.
00:00:40
>> Deutsche says, it has no plans to raise cash but while the DOJ settlement might ultimately come down a bit, the bank could face other fines over suspected money laundering. All these could lead Germany's flagship blender with limited options.>> This may force Deutsche to sell assets that it didn't really want to sell quite yet.
00:00:59
It has a cross bank unit, it has retail operations in Italy and in Spain. It also has global transaction banking and asset management. All of these assets are very difficult to sell and at the moment, it's a very difficult period. A firesale is bad, capital raising is limited.
00:01:14
So Deutsche really has a tough time ahead of it.>> Sources telling Reuters that the bank is looking at a possible strategy shift in the United States. Abandoning its most important market looks unlikely but it could scale down its activities there. Deutsche's one-fifth fallen revenue in the first half looks a lot like the scale of the Euro near decline Britain's RBS suffered six years ago.
00:01:37
That snowballed to leave RBS a husk of its former self.