Lender is sued in tax case, gets deadline from watchdog
Analysts say bank probably had a difficult fourth quarter
First there were the raids at Deutsche Bank AG’s headquarters, then came the global market selloff. And the flow of bad news for Chief Executive Officer Christian Sewing is far from over.
Germany’s largest lender was sued in a case tied to an industry-wide tax evasion scheme, and a watchdog took the unusual step of setting deadlines for the bank to review its due diligence on clients, reports showed on Thursday. Earlier in the week, it emerged that the firm was among lenders stuck with more than $1.2 billion of riskier loans, after failing to sell them to investors late last year.
While the setbacks individually are small compared with the pain the bank has been going through over the past years, the constant trickle of yet more bad news is threatening to undermine confidence in Sewing’s ability to turn its fortunes around. The lender had a difficult fourth quarter, particularly in debt capital markets and fixed income sales and trading, Mainfirst wrote in a report this week after discussions with the bank. UBS Group AG expects Deutsche Bank will report a loss in the fourth quarter.
“We also understand that loan loss provisions are likely to come out higher than in previous quarters,” Mainfirst wrote.