Deutsche Bank AG (ETR: DBK) have seen their shares dip on Tuesday morning, after the firm gave investors a modest presentation update.
Deutsche Bank has been in recent crisis, and has experienced a turbulent 2019 where shareholders have been kept on the edge of their seats.
The bank in July had flagged a loss this year and announced restructuring plans worth $7.4 billion including the elimination of 18,000 jobs.
At the end of October, the firm reported a third quarter loss which sent shares in free fall.
The third quarter results followed a poor trading update in the second quarter which puts heavy scrutiny on the bank’s operations and management.
The quarterly loss follows one of €3.15 billion in the second quarter and contrasts with a €229 million net profit a year earlier.
Today, the firm pared back its revenue growth target, which sent shares in red.
The firm blamed rock bottom interest rates for bruising business in a modest update to shareholders and investors.
The German bank said it expected revenue at its core banking business to grow by just 1% in the run up to 2022, half the growth level estimated in July. It put emphasis instead on efforts to cut billions of euros in costs.
Chief Executive Christian Sewing pointed to “significant progress” in recent months in turning around the bank in the presentation ahead of an investor day. But the bank highlighted the impact of low interest rates in the euro zone on its business.
The firm also added that low rates would hurt its retail bank as well as corporate banking in the medium term, but remained hopefully in its investment banking division.
The bank said it had taken steps to cope with low rates, including lending more and “selectively” passing on to customers the costs it faces for keeping cash at the central bank.
The update that Deutsche Bank have provided, reiterate the state of the European banking industry.
Just one week ago, Moody’s lowered the UK banking sector’s outlook from stable to negative.
Alongside Deutsche Bank, many other firms in the industry have experienced business slumps.
At the end of October, Lloyds Banking Group PLC (LON: LLOY) saw their shares crash following a poor quarterly update. The firm saw a 97% fall in pre-tax profit for the third quarter from last year.
Additionally, FTSE100 listed HSBC (LON: HSBA) are another household name who have experienced the slump, and have announced changes to their structural organization as well as a strategy to lower costs leading to job cuts.
Shareholders of Deutsche Bank will remain cautious as it seems that the German firm is fighting an increasingly tough battle, however if a concerned effort is made to cut costs and stimulate business then shareholders can hold onto something.
Shares of Deutsche Bank trade at €6, dipping 1.06%. 10/12/19 11:30BST.
