Germany’s biggest bank with $1.4 trillion in assets facing financial collapse

• German Chancellor Olaf Scholz reassured Deutsche Bank customers and investors that the bank is thoroughly reorganized and modernized to meet the banking demand.
• The bank announced on Friday that it will redeem its $1.5 billion Fixed to Fixed Reset Rate Subordinated Tier 2 Notes due 2028.

In the latest from the global banking crisis, one of the oldest German multinational investment banks, Deutsche Bank AG (NYSE: DB), has seen its shares tumble as much as 14 percent on Friday. Following the recent collapse of another European bank, Credit Suisse, investors have grown wearier of traditional banks. Moreover, already three regional banks from the United States have collapsed, with two of them, Signature Bank and Silicon Valley Bank, victims of a bank run.

According to market data from MarketWatch, Deutsche Bank shares traded around $8 on Friday, down two percentage digits in the past 24 hours. As a result, Deutsche Bank shares are down approximately 26 percent in the past month. Notably, the German banking giant has a market capitalization of about €19.03 billion and 2.04 billion shares outstanding.

Closer Look at Deutsche Bank and the Market Outlook 

The bank has been on investors’ radar following the rising inflation and the high demand for digital banking. According to data from S&P Market Intelligence, Deutsche Bank’s credit default swaps (CDS) – a form of insurance for bondholders – shot up above 220 basis points, which is the highest since late 2018 from 142 bps just two days ago. Nonetheless, the credit default swaps (CDS) rose sharply for all European banks.

WTF? Costs of insuring against Deutsche Bank default (CDS prices) jump in violent move while share price plunge as stress in banking system keeps rising following Fed rate hike. pic.twitter.com/yt56WL1df9

— Holger Zschaepitz (@Schuldensuehner) March 23, 2023

Nevertheless, German Chancellor Olaf Scholz reassured Deutsche Bank customers and investors that the bank is thoroughly reorganized and modernized to meet the banking demand. Olaf stated.

“Deutsche Bank Is Very Profitable, There Is No Reason For Concern,” 

Notably, the bank has not provided any official communication on the sudden share dip as of Friday. Meanwhile, the bank announced it will redeem its $1.5 billion Fixed to Fixed Reset Rate Subordinated Tier 2 Notes due 2028.

“Deutsche Bank has been in the spotlight for a while now, in a similar way to how Credit Suisse had been,” Stuart Cole, a head macroeconomist at Equiti Capital, said. “It has gone through various restructurings and changes of leadership in attempts to get it back on a solid footing, but so far, none of these efforts appear to have really worked.”

Another Win for Bitcoin

With each failure of traditional financial institutions, investors are getting to understand the importance of Bitcoin in fighting rising global inflations. Moreover, Bitcoin price is up about 70 percent YTD to trade around $28k on Friday.

As the stock market closes on Friday, crypto analysts anticipate a Bitcoin pump towards $30k before a retrace. 

Bank crisis is spreading arround. Deutsche Bank now under pressure. Lifeline #Bitcoin pic.twitter.com/oAEkVahevd

— Stockmoney Lizards (@StockmoneyL) March 24, 2023

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