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'The newsflow is not good' says Deutsche Bank boss as S&P cuts credit rating

Deutsche Bank chief Christian Sewing has admitted he is “sick and tired of bad news” for Germany’s biggest lender, after it suffered a further blow with a credit downgrade.
Ratings agency Standard & Poor’s said it was cutting Deutsche Bank’s credit rating to BBB+ from A- after last week's announcement that it would be shedding more than 7,000 jobs in a sweeping cost-cutting plan.
It has also emerged Australian regulators plan to prosecute Deutsche Bank and fellow lenders ANZ and Citigroup on criminal cartel charges. The three banks said they complied with market rules and would defend the allegations.
Earlier this week it was revealed that the US Federal Reserve decided to put the bank’s US arm on a “troubled” watchlist up to a year ago, as first reported by The Wall Street Journal.
The news pushed Deutsche Bank shares to an all-time low yesterday, although they rallied in Frankfurt this morning, up almost 4pc by lunchtime trading.
'The newsflow is not good' says Deutsche Bank boss as S&P cuts credit rating

Christian Sewing 
"Let's be straightforward: the news flow is not good,” Mr Sewing wrote in a memo to staff. “My dear colleagues, the last few years were tough. Many of you are sick and tired of bad news. That's exactly how I feel."
The bank boss replaced Yorkshire-born chief John Cryan in April, after Deutsche ran up its third straight annual loss. He added that there was “good news in the bad”.
“There’s no reason for us to be discouraged. Yes, our share price is at a historic low. But we’ll prove that we have earned a better valuation on the financial markets. We’ve achieved a lot we can be proud of. Now we need to look forward,” he said.
S&P explained it had cut Deutsche Bank’s rating due to the “non-negligible execution risks” involved in Mr Sewing’s turnaround scheme, which will be focussed on the bank’s under-performing investment banking arm.
Good Morning from #Germany where Deutsche Bank continues to suffer from horrible news. Market Cap of Germany's national banking champion has dropped to $22.9bn. Deutsche Bank is no longer among the 100 largest financial institutions in the world. pic.twitter.com/GO3X0y1kwy— Holger Zschaepitz (@Schuldensuehner) June 1, 2018
The cuts are likely to include UK jobs as the bank employs more than 8,000 people within the investment banking unit in Britain.
“While we consider management is taking tough, although likely inevitable, actions and proposes a logical strategy to successfully restore the bank to more solid, sustainable profitability over the medium to long term, the bank appears set for a period of sustained underperformance compared with peers, many of whom have now finished restructuring,” S&P said.
The ratings agency said it was “broadly supportive” of Mr Sewing’s strategy and it believed it would “ultimately support Deutsche Bank’s creditworthiness” down the line.
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