Deutsche Bank Drops on Report Jain Will Warn on TradingNicholas Comfort
Deutsche Bank AG, Europe’s biggest investment bank by revenue, dropped in Frankfurt following a report that one of its co-chief executive officers will warn next week about a decline in the debt-trading business.
The stock fell 2.1 percent to 35.36 euros ($47.81), its first decline this week. Co-CEO Anshu Jain may tell investors at a Sept. 25 conference in London that third-quarter revenue from fixed-income trading lags behind the same period in 2012, the Financial Times reported, without citing anyone.
Global investment banks have seen a slowdown in debt trading, a key portion of their revenue, amid uncertainty about the Federal Reserve’s plans to reduce the pace of monthly bond-buying. Jain, 50, has previewed earnings at conferences before and will probably do so again next week, Dirk Becker, an analyst with Kepler Cheuvreux, said in an interview today.
“I expect Jain to make a cautious statement on fixed income in the third quarter,” said Becker, who is based in Frankfurt and recommends buying Deutsche Bank stock. “It won’t be a terrible quarter, but Deutsche Bank will probably see revenue fall from last year’s quarter.”
Deutsche Bank spokesman Michael Golden declined to comment when reached by phone in Frankfurt today. The company is scheduled to report third-quarter earnings on Oct. 29.
Banks including JPMorgan Chase & Co. and Barclays Plc have indicated to investors that trading revenue for the period probably will be down from a year earlier. Jefferies Group LLC, whose third quarter ended in August, said this week that fixed-income trading revenue plunged 88 percent while equity trading fell 28 percent.
Jain is scheduled to speak at a conference hosted by Bank of America Corp. at 2 p.m. in London on Sept. 25. He used two similar occasions to give investors an indication of revenue in the first and second quarters of this year.
Fed officials have been debating when to slow their $85 billion-a-month pace of bond buying, known as quantitative easing, as the economy recovers and low interest rates prompt investors to take more risk.
Most economists surveyed by Bloomberg now expect the central bank to begin tapering asset purchases in December after the Fed decided this week to maintain the pace.
Fed comments in mid-May led some investors to anticipate a slowdown in the bond purchases, causing “a broad sell-off in June across most asset classes” and making market conditions “substantially more challenging,” Deutsche Bank Chief Financial Officer Stefan Krause said on a July 30 conference call with analysts.