Deutsche Bank Gains Qatar as Shareholder

REPLAY VIDEO
Your next video will start in
Pause

Recommended Videos

  • Info

  • Comments

  • VIDEO TEXT

May 19 (Bloomberg) -- Deutsche Bank AG, Europe’s biggest investment bank, sold about 60 million shares to the Qatari royal family to help raise 8 billion euros ($11 billion) in its second-biggest capital increase. Hans Nichols reports on Bloomberg Television’s “Bloomberg Surveillance.” (Source: Bloomberg)

Hans, what did you learn?

I learned that he is in control.

There is a certain choreography to these interviews.

What mr.

Jain try to say is this is the right time to get capital and he thinks the market is ripe for it, that is how he put it.

We decided we would get one step ahead, with a capital buffer.

And the innovation position.

Your second question was why $1 billion.

We started with the ratio of 9.5, then up to 11.8, which we think is a very healthy buffer.

So tom, i would suggest that they have full floors of people in the deutsche bank building behind me running analytics on how they got that number.

Maybe alchemy but i suspect that they ran the numbers.

How threatened is mr.

Jain's tenure?

If this is another cash call, does he have the support of the deutsche bank boards?

He seems to have support and his position seems to be strong.

Mr.

jain got ahead of himself when he said the hunger march from new castle is open.

This was not the case.

You have massive litigation and potential problems.

So nobody really blame him, some shareholders do, but there is not a great deal of blame that he did not anticipate the new regulatory environment and potential litigation.

$3 billion they set aside last year, and what the other banks are doing is the decline in currencies and commodities.

Time to look around the corner and see all three of those events.

I want to bring in bill cohen, i know that there are some question marks about him and how much of a good cultural fit he was at deutsche bank.

He was taking some german lessons.

But how secure is the job when it comes down to it, are they looking to eventually get rid of him?

I have not heard any of that.

There is something inherently unstable at having 2 ceos.

He is a well-regarded investment banker and i think that deutsche bank is that these use institution to run.

I think that he is a good face of it.

On the other hand if you said 13 months ago they would not need capital anymore, and now you say that we do need $8 billion in capital, that is not exactly the kind of statement that you want to make and i don't hear american ceos making those statements.

I suspect that he will weather this.

If they raise all this capital and soothe the shareholders and the stock goes down -- using trouble.

If the stock price goes up and this is the right moment to raise capital, people will forget this and he will be fine.

Any of the banks, deutsche bank made a statement about trying to get a return on equity versus 15%, how are any of the banks going to do that?

It is hard and harder if you are raising $8 billion in new capital.

Your capital is that much larger and i don't see how you get a return.

There is a big risk-reward business.

And so i think that the firms that are best positioned, like goldman sachs, which is incredibly well-positioned, will probably have the highest lead.

Deutsche bank has the two geographies, what is the response of the german people and the german government to this cash call?

The german government has not weighed in.

We will see with the regulators say in frankfurt but so far berlin has been quiet.

$8 billion is a big number.

Just getting to what mr.

Cohen is saying, this is a big number but there is a giant unknown in all of this.

That is why the credit suisse case is so important, nobody knows with a final bill will be for any of these banks, how many indictments or guilty pleas will be handed out and nobody knows if there is systemic risk.

And that is the take on this, if there is systemic risk for having the guilty pleas by major banks, or is this just the bank trying to game the system?

Hans nichols, thank you for joining us and congratulations on your important interview, we will see that on our platforms throughout the day.

Time for the twitter question of the day, what is the tipping point for ousting a ceo?

Do you want to weigh in on this?

Criminal indictments, one, and a third might be a dilutive capital raise which we are

This text has been automatically generated. It may not be 100% accurate.

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change