REUTERS/Luke MacGregor
Skies are darkening over Deutsche Bank
- Deutsche Bank's offices were raided again on Friday, following a police raid on Thursday as part of a Panama Papers-related money-laundering investigation.
- The bank is under increasing pressure following a litany of allegations against the German lender, its shares dropped again today to a record low. The stock's year-to-date decline is about 50%.
Deutsche Bank's difficult week continued as prosecutors raided the lender's offices in Frankfurt for a second day, a sign the probe about its role in a global money laundering scandal is widening.
The shares fell to a record low. Again. They were down about 3% on Friday, taking its year-to-date plunge to a whopping 50 percent. The market capitalization of the once-mighty bank is about $19 billion, not a significant amount more than the bank has had to pay in fines since the financial crisis.
The bank has been dogged by high levels of executive turnover and legal fines, and is on the back foot again after successive CEOs have pledged to turn the bank around. CEO Christian Sewing was appointed in April with the intention of improving performance at the lender.
It's been a rough few weeks for Deutsche Bank. The bank's head of the Americas, Tom Patrick, is thought to be leaving the bank as part of a major reshuffle at the beleaguered lender. He is the third person to hold the role in the past 18 months. And the FT reported that questions have swirled around the performance of the investment division head Garth Ritchie after revenues at that division plunged.
Adding to the bank's growing list of problems: last week Deutsche Bank's role in Danske Bank's money laundering scandal came to light. The shares tumbled again after Citigroup CEO Michael Corbat dismissed talk of a merger between the two lenders.
That was all before Thursday, when about 170 police officers and other officials seized documents during searches through six different properties, including one employee's home.
The plot thickens
An odd twist in the saga comes from the Wall Street Journal, which reported that Federal Reserve's vice chairman for supervision, Randal Quarles, turned up for a lunch with CEO Christian Sewing and regulatory chief Sylvie Matherat during the raid.
The lunch was prescheduled and the two events were unrelated, a Fed spokesperson told the WSJ. (But it's worth noting that Matherat is responsible for a department which deals with the detection and prevention of financial crime by clients of the bank.) Matherat's office was allegedly raided as part of the investigation as well, the WSJ reported.