Deutsche Bank shares have retreated for a third day, losing over a fifth of their value in a month. The share prices fell by over 9% in early trade markets on March 24, 2023.
Germany’s Deutsche Bank in trouble?-Shares plummets by 9%
Germany’s Deutsche Bank seems to be the latest bank engulfed by the ongoing banking meltdown as its shares are receding heavily. The bank’s shares fell by over 9% on Friday following concerns regarding its stability.
Its shares have fallen consistently over the past three days, shedding over a fifth of their value. The reason behind the investors’ cash out of their shares is the bank’s Credit default swaps (insurance for the company’s bondholders against its default) which leaped to 173 basis points on March 23, 2023 night from 142 basis points noted in the previous day.
Such a big step to the negative side must have spurred the bank’s investors, who are already nervous following the meltdown of major banks like Silvergate, Silicon Valley Bank, and Credit Suisse. As such, investors dumped the bank’s shares and its AT1 bonds.
Banks continue seeing massive stock declines
The current global financial crisis has been aggressively exposing weak links in the sector. It was first noted in the sell-off of unregulated assets like crypto but has shown that it’s even prone in the regulated pillars of the economy, banks.
It started with the collapse of the Silicon Valley Bank in Mid-March 2023. The FDIC took control of the bank and bailed customers out. The fall of this US regional bank shook the crypto and stock markets heavily, causing the de-pegging of Circle’s USDC, which was confirmed to have its reserves in the bank.
As a reflex action, Banks’ investors globally started looking into the management of their investments only to notice that many others were having the same balance sheet issues as SVB. Since then, banks have been seeing massive sell-offs, and there doesn’t seem to be an end. Keep watching Fintech Express for updates on the story.