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.
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.
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.
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 largest lender has moved a significant chunk of its financial services euro-clearing operation away from London to Frankfurt, as concerns over the City's post-Brexit strength continue.
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