According to the financial supervisory authority Bafin, Germany’s banks are threatened with significant losses as a result of the Corona crisis. “We have certainly not yet seen the worst,” said the President of the Federal Financial Supervisory Authority (Bafin), Felix Hufeld, on Wednesday at a conference in Frankfurt. The industry must be prepared for the fact that there will be a number of loan defaults: “The big end is still pending.”
Scenario calculations would come to the result that two to seven percent of the core capital of the institutes could be consumed, explained Hufeld. This is manageable for the industry in Germany as a whole – but this is not a statement about the 20 to 30 weakest institutes. At the moment there is “no need to panic” with regard to financial stability. But the selection process among the banks will be tightened, said Hufeld.
Deutsche Bank boss Christian Sewing does not currently see the industry in a critical situation despite looming loan defaults. “Looking ahead to the next 12 to 18 months, I see the banks in a good and comfortable position to manage this really well,” said the manager. “I’m really far from saying we are going into a banking or financial crisis here. We are much better positioned.”
Sewing warned that the economy as a whole should use the time bought with billions in aid during the Corona crisis for a drastic restructuring. “Europe threatens to suffer again from its greatest weakness: We are relatively good at counteracting the symptoms of a crisis. But we are slower to adjust to a new normal situation in the long term,” said Sewing.
A profound restructuring has been going on at Deutsche Bank since last summer. Germany’s largest financial institution, for example, has said goodbye to institutional stock trading and founded a corporate bank that looks after medium-sized companies, family businesses and multinational corporations. In addition, the number of full-time positions in the Group is to be reduced by around 18,000 to 74,000 worldwide by the end of 2022.
“We have made very good progress with our transformation in the last twelve months and will continue to implement it with absolute discipline,” affirmed Sewing. After the bank was in the black before taxes in the first half of the year, he said he was not going to be dissuaded from the goal of achieving this in 2020 as a whole.
Analysts on average do not believe that this is the Dax
-Group will succeed. For the year as a whole, they expect an average of almost half a billion euros in pre-tax losses. In the first half of the year, Deutsche Bank had Earned 364 million euros before taxes./ben/stw/DP/jha
ISIN DE0008469008 DE000CBK1001 DE0005140008 DE0007472060
AXC0184 2020-09-02/13:11
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