In a conference held in Singapore, Deutsche Bank’s (DB - Free Report) CEO assured employees in the Asian region that the company intends to continue developing operations in the continent with no plans of exit. The news was reported by Bloomberg.
After the bank announced major changes in U.S. investment banking segment as it continues to execute its global overhaul strategy, rumors of Deutsche Bank cutting jobs in Asia had spread. This followed the CEO’s remarks, post first-quarter earnings release, of reducing exposure in the United States and Asian sectors with limited cross-border activity.
However, during the conference, Christian Sewing, CEO at Deutsche Bank, promised to keep the bank “strong” in the region while closing offices and businesses in other parts. He said, “We can only be relevant to our clients if we continue to be strong in Asia."
Also, Sewing disclosed how important Asia is for Deutsche Bank in terms of business. He said that of the bank’s top 100 clients globally, 88 are doing business with it on matters related to the region.
Most of the big rating agencies have put Deutsche Bank under observation to decide its credit ratings. Given the bank’s continuous struggle to keep its performance stable, a downward rating revision might be likely. This is expected to further impact the investors’ confidence in the stock and might even make funding expensive.
Further, the declining trend of dollar against other currencies is likely to continue impacting the German-based lender’s revenues. In first-quarter 2018, unfavorable exchange rate movements were partly responsible for year-over-year decline in income.
Moreover, lack of clarity about the bank’s global overhaul moves, is gradually leading investors to lose patience.
In six months’ time, the company’s shares have lost 28.3% on the NYSE against 2.4% growth recorded by the industry.
Deutsche Bank currently carries a Zacks Rank #5 (Strong Sell).
Stocks to Consider
Lloyds Banking Group plc (LYG - Free Report) earnings estimates for 2018 have been revised slightly upward over the last 60 days. Also, its shares have gained 5.4% in the past six months. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Bank of N.T. Butterfield & Son Limited (NTB - Free Report) has witnessed 4.1% upward estimate revision in the last 60 days. In six months’ time, the company’s shares have gained more than 27%. It carries a Zacks Rank #2 (Buy).
Bank of Montreal (BMO - Free Report) carries a Zacks Rank of 2. The Zacks Consensus Estimate for the company has witnessed slight upward estimate revision in the last 60 days for the current year. Its share price has gained 3.7% in the past six months.
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