Deutsche Bank chief executive Christian Sewing ‘sick and tired’ of bad news as S&P downgrades credit rating
Deutsche Bank’s new chief executive told employees today he was “sick and tired” of bad news surrounding the lender, after credit rating giant Standard & Poor’s downgraded Deutsche’s credit rating.
Christian Sewing reiterated a commitment to Deutsche’s turnaround in his message to staff, saying the bank will prove that it has “earned a better valuation” on the financial markets.
Germany’s biggest lender said last week it would be cutting more than 7,000 jobs as part of renewed efforts to return to profitability, but ratings agency S&P said today it had cut its rating on the bank to BBB+ from A-.
Read more: Deutsche Bank’s US subsidiary put on federal agency list of ‘problem’ banks
It expressed concerns about Deutsche’s ability to overhaul its operations, eyeing “significant execution risks” in the delivery of the strategy.
That came after a warning in April that S&P might downgrade Deutsche after the bank ditched former boss John Cryan to have Sewing take the reins, with S&P saying that an abrupt change in chief executive could prolong the lender’s restructuring.
In response to the update from S&P, Sewing sent a message to the bank’s employees today, saying:
Many of you are sick and tired of bad news. That’s exactly how I feel. But there’s no reason for us to be discouraged.
Yes, our share price is at a historic low. But we’ll prove that we have earned a better valuation on the financial markets.
We’ve achieved a lot we can be proud of. We have reduced risks by billions of euros, we have strengthened capital and we have reorganised our bank. We can tick those boxes.
Yesterday, Deutsche Bank’s share price fell sharply on news that a year ago the Federal Reserve had downgraded three of its US subsidiaries and classified them as being in “troubled condition”.
Today though, Sewing said: “At group level, our financial strength is beyond doubt.”
He added: “S&P does not base its decision on any doubts about the strength of our balance sheet. Rather, we are simply not profitable enough.”
Read more: Deutsche Bank cuts top London investment banking team