Deutsche Bank (DB) was down 4.5% at recent check, after a disappointing second-quarter report.
This morning, Deutsche said it earned to €334 million ($443 million), o €0.32 per share, down from €656 million in the same quarter last year.
Revenue rose 2% to €8.22 billon from €8.02 billion.
Analysts were looking for the company to earn €0.82 a share on revenue of €8.39 billion.
Legal costs were the big drag in the quarter, as Deutsche is involved in investigations into the manipulation of interbank rates and the U.S. mortgage business, among other issues. The quarter included a €630 million charge for potential litigation and related costs, and Deutsche said it now has litigation reserves of €3 billion, up from €2.4 billion at the end of the first quarter.
CFO Stefan Krause told analysts that the bank has already hit its targeted leverage ratio of 3% under European regulations put into law in June, but too many moving parts make calculating the ratio under new proposals impossible. Analysts are estimating the bank's new leverage ratio is 2.3%.
S&P Capital IQ's Frank Braden maintained a Buy rating on Deutsche's American depositary shares, but lowered his earnings estimates for the year. "We view the lower fixed income results as a product of the operating environment and not a change in the bank’s competitive position. Capital ratio improvements are tracking ahead of our expectations as the bank reported a Basel 3 capital ratio of 10.0% during the quarter."
No comments:
Post a Comment