Deutsche Bank's US division has failed the second round of the US Federal Reserve's annual stress test. The Fed cited “widespread and critical deficiencies” in its appraisal of the lender. 31 of the 35 banks examined passed the test.
The European Banking Authority (EBA) has published results of a stress test it ran on major lenders from the EU and Norway, showing that a clutch of British banks and two lenders from Italy fared worst.
German banking giant Deutsche Bank's US operations failed the Fed's second round of stress tests, the qualitative test. Of the big banks tested, 32 out of the 35 passed the test.
The biggest US banks, including Deutsche Bank's US subsidiary, are equipped to survive a recession, the Fed says. Yet there are warning signs, including for Deutsche, whose credit rating took another hit on Thursday.
Germany's biggest lender has surprised the market by announcing projected profits of around €700 million for the second quarter of 2018. The bumper results come nine days ahead of the release of their earnings report.
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