We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Deutsche (DB) Ratings Affirmed by Moody's, Outlook Upgraded
Read MoreHide Full Article
Ratings of Deutsche Bank AG (DB - Free Report) have been affirmed by Moody's Investors Service. Notably, outlook of the company has been upgraded from negative to stable on account of A3 long-term deposit and senior unsecured debt ratings. The ratings agency has also affirmed Deutsche’s Baa3 junior senior unsecured debt ratings.
Reasons Behind Outlook Upgrade
The ratings agency is of opinion that the company’s efforts to restructure operations and business model have been encouraging. Also, Deutsche’s plans to focus more on capital markets operations is expected to make the journey to achieving a more balanced and sustainable business model quicker.
Further, Deutsche’s “sustained solid capital and liquidity buffers” led Moody’s to upgrade the outlook. Another factor that made ratings agency change outlook to stable was the company’s long-term deposit and senior unsecured debt ratings. This reflects Moody's opinion that the shortcomings in corporate governance and execution of earlier restructuring plans as well as overcoming structural and cultural issues have declined post change of management in 2018.
Reasons Behind Ratings Affirmation
Deutsche’s progress on achieving medium-term targets are seen to support earnings stability, lower capital and leverage exposure consumption and its reliance on wholesale funding. Also, the company’s restructuring strategies have helped in freeing capital for reinvestment and self-financing.
The ratings agency was also impressed by the company’s strategy to keep capitalization metrics stable, despite incurring restructuring and transformation expenses along with making additional provisions.
Also, Moody’s feels that Deutsche will successfully execute its proposed plans, including sustaining its revenue base in its fixed income-related businesses, reducing the drag of the newly formed non-core asset unit and sustaining its corporate banking franchise against competition.
Moreover, Moody's believes that given the bank's current capitalization level, bondholders will remain protected. Further, its “granular and highly collateralized loan book” will help contain asset quality deterioration and Deutsche's solid liquidity metrics.
Per the Moody’s article, the affirmation also considers the rating agency’s unchanged Loss Given Failure analysis in assessing the bank's “existing bail-in-able debt cushion and resulting loss severity for its different debt classes”.
Factors That Can Lead to Ratings Upgrade or Downgrade
Deutsche Bank’s ratings will be upgraded if the bank keeps making steady progress toward its medium-term targets and improvement in earning sustainably while continuing to invest to strengthen its technology platform and control infrastructure as well as maintaining a prudent and well controlled risk appetite. Further, improving leverage ratio and maintaining solid capital and liquidity metrics around current levels, as well as continued sound asset quality, could result in upward ratings.
On the flip side, ratings could be downgraded if Deutsche does not make remarkable progress in delivering its overhaul strategies, particularly regarding revenue attrition, realized cost saves and CRU-related de-risking costs.
Also, downward pressure will be created if the company faced additional market headwinds or litigation costs beyond those covered by existing reserves.
In the past few months, Moody’s Investors Service has affirmed ratings and outlook for many finance sector companies. Amid the coronavirus pandemic and the resultant economic uncertainties, the rating agency has affirmed the ratings and maintained stable outlooks for Eaton Vance (EV - Free Report) , FirstCash (FCFS - Free Report) and SLM Corporation (SLM - Free Report) .
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
Image: Bigstock
Deutsche (DB) Ratings Affirmed by Moody's, Outlook Upgraded
Ratings of Deutsche Bank AG (DB - Free Report) have been affirmed by Moody's Investors Service. Notably, outlook of the company has been upgraded from negative to stable on account of A3 long-term deposit and senior unsecured debt ratings. The ratings agency has also affirmed Deutsche’s Baa3 junior senior unsecured debt ratings.
Reasons Behind Outlook Upgrade
The ratings agency is of opinion that the company’s efforts to restructure operations and business model have been encouraging. Also, Deutsche’s plans to focus more on capital markets operations is expected to make the journey to achieving a more balanced and sustainable business model quicker.
Further, Deutsche’s “sustained solid capital and liquidity buffers” led Moody’s to upgrade the outlook. Another factor that made ratings agency change outlook to stable was the company’s long-term deposit and senior unsecured debt ratings. This reflects Moody's opinion that the shortcomings in corporate governance and execution of earlier restructuring plans as well as overcoming structural and cultural issues have declined post change of management in 2018.
Reasons Behind Ratings Affirmation
Deutsche’s progress on achieving medium-term targets are seen to support earnings stability, lower capital and leverage exposure consumption and its reliance on wholesale funding. Also, the company’s restructuring strategies have helped in freeing capital for reinvestment and self-financing.
The ratings agency was also impressed by the company’s strategy to keep capitalization metrics stable, despite incurring restructuring and transformation expenses along with making additional provisions.
Also, Moody’s feels that Deutsche will successfully execute its proposed plans, including sustaining its revenue base in its fixed income-related businesses, reducing the drag of the newly formed non-core asset unit and sustaining its corporate banking franchise against competition.
Moreover, Moody's believes that given the bank's current capitalization level, bondholders will remain protected. Further, its “granular and highly collateralized loan book” will help contain asset quality deterioration and Deutsche's solid liquidity metrics.
Per the Moody’s article, the affirmation also considers the rating agency’s unchanged Loss Given Failure analysis in assessing the bank's “existing bail-in-able debt cushion and resulting loss severity for its different debt classes”.
Factors That Can Lead to Ratings Upgrade or Downgrade
Deutsche Bank’s ratings will be upgraded if the bank keeps making steady progress toward its medium-term targets and improvement in earning sustainably while continuing to invest to strengthen its technology platform and control infrastructure as well as maintaining a prudent and well controlled risk appetite. Further, improving leverage ratio and maintaining solid capital and liquidity metrics around current levels, as well as continued sound asset quality, could result in upward ratings.
On the flip side, ratings could be downgraded if Deutsche does not make remarkable progress in delivering its overhaul strategies, particularly regarding revenue attrition, realized cost saves and CRU-related de-risking costs.
Also, downward pressure will be created if the company faced additional market headwinds or litigation costs beyond those covered by existing reserves.
Shares of this Zacks Rank #3 (Hold) firm have gained 42.3% over the past six months compared with the industry’s growth of 15.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past few months, Moody’s Investors Service has affirmed ratings and outlook for many finance sector companies. Amid the coronavirus pandemic and the resultant economic uncertainties, the rating agency has affirmed the ratings and maintained stable outlooks for Eaton Vance (EV - Free Report) , FirstCash (FCFS - Free Report) and SLM Corporation (SLM - Free Report) .
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>