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Deutsche Bank says it doesn't need capital increase
DESPITE billions of dollars in losses in recent years, Deutsche Bank AG considers itself able to overcome the economic shock from the corona-virus without a capital increase.
"We have enough capital to weather severe economic crises," management board member Stuart Lewis told Frankfurter Allgemeine Sonntagszeitung.
Mr Lewis said Germany's biggest bank is able to absorb currently foreseeable burdens without weakening its equity base excessively. Last week, Deutsche Bank announced an increase of provisions for possible credit losses to around 800 million euros (S$1.25 billion), the highest amount in over a decade. For the rest of the year, according to Mr Lewis, lower provisions are expected.
Business in the second quarter "continued to develop well," Deutsche Bank's risk chief said. Analysts expect the bank to post another loss this year and management has said that it's more difficult now to achieve its plan for a pre-tax profit.
Chief executive officer Christian Sewing has repeatedly said the bank's capital buffers and liquidity position it well for the crisis. He has also given a positive outlook on revenue from trading securities in the second quarter.
According to Mr Lewis, Deutsche Bank is also benefiting from the German government's unprecedented aid programmes. "Fortunately, almost 50 per cent of our loan book is in Germany, which is coping better with this crisis than almost any other country," the Briton said. Germany, he added, has "become an international role model" during the crisis. BLOOMBERG