Deutsche Bank Earnings Warning, 52-Week Low Near (DB)

Deutsche Bank AG (NYSE: DB) might not be the biggest concern for Americans.  The problem is that it is one of Europe’s top banks, and guess who is trading lower after disclosing that it now expects a third quarter loss on earnings?  This came in a preliminary prospectus for a capital raise to boost capital.

Germany’s prestigious largest of its listed banks warned in a filing that it would now have a net loss for the third quarter after resetting the value of its large investments in Deutsche Postbank AG that it is acquiring a major stake in.  The bank will take charges of 2.3 billion Euros, or close to $3 billion (U.S.) as it increases its ownership in Postbank in a deal that has been in the works for almost two years.

Deutsche Bank wanted to grow and improve its retail operations and it wanted to diversify away from being mostly investment banking for its revenues.  It seemed like sound logic at the time.  Unfortunately, snapshots in time sometimes get in the way of the long-term vision.

Deutsche Bank shares opened up down over 8% in Frankfurt and it looks the same so far in the U.S. as ADRs are indicated up 2% in recovery after yesterday’s drop and are up almost 2% at $55.20.  What is more important is that the 52-week trading range is $54.14 to $84.93.

JON C. OGG

(re-post of prior version)