Deutsche Bank CFO says banks have had tough start to year
FRANKFURT (Reuters) - Deutsche Bank's finance chief said the first two months of 2016 were the worst start to a year for banks in general that he has seen in his banking career.
"That has left its marks on our business," Marcus Schenck told German daily Boersen-Zeitung in an interview published on Tuesday. "All operations which are close to capital markets are affected," he said, echoing remarks from Chief Executive John Cryan last week.
Deutsche Bank shares dropped 1.4 percent in early trading, underperforming the European banks sector which was 0.9 percent lower.<.SX7P>
Trading and wealth management operations have seen a significant drop from year-earlier levels in the first two months, Schenck said. He also said that March was proving to be much better.
Schenck said difficulties in finding counterparties also meant that Deutsche was unable to offload as many assets as planned as part of its strategy to cut its balance sheet to comply with bank rules.
Analysts from Goldman Sachs, who on Tuesday cut Deutsche Bank's target price, described the first quarter as "extremely challenging" for European investment banks, with activity slow across all major revenue areas.
"We now forecast that European investment bank revenues, on aggregate, will decline around 25 percent year-over-year," Goldman Sachs said in a note.
Ratings agency Moody's said late on Monday it had placed Deutsche Bank ratings on review for possible downgrade, only two months after cutting its debt rating, citing rising execution hurdles as the bank tries to stabilise profits over the next three years.
(Reporting by Arno Schuetze. Editing by Jane Merriman)
