Frankfurt am Main (AFP) – Shares in Deutsche Bank fell sharply in morning trading Friday, with investors shying away from Germany’s biggest lender as it launches an umpteenth restructuring.
By 11:45 am (0945 GMT), stock in Deutsche had lost 4.5 percent to trade at 11.30 euros ($13.66) in Frankfurt, making it the worst performer on the DAX index of blue-chip German shares.
The bank had on Thursday announced a 79-percent year-on-year collapse in first-quarter profits, to 120 million euros ($145 million).
Newly-installed chief executive Christian Sewing also heralded deep cuts to its flagship corporate and investment banking division, with Deutsche planning a retreat from some activities in the United States and Asia in favour of a renewed focus on Germany and Europe.
But analysts at Societe Generale complained of a “frustrating” lack of detail in Sewing’s scheme — announced less than three weeks after he took the helm — and said “damage to employee morale is clearly evident” from its weak earnings.
“Investors will be pleased and open to the restructuring but want more details,” JP Morgan analysts wrote, highlighting Deutsche’s “limited track record of delivery” on past restructuring attempts and “very weak” first-quarter results.
New boss Sewing, a Deutsche Bank lifer, promised to bring back the firm’s “hunter mindset” when he took over from John Cryan earlier this month.
The British CEO put out many of the worst legal fires that had broken out at Deutsche.
Many of bank’s troubles had been left over from its breakneck bid to compete with US-based global banking giants in the years running up to the financial crisis.
He then started the bank on a path of restructuring and renewed focus on its home market.
He nevertheless failed to bring the lender back to profitability, reporting three years of losses in a row.