Deutsche Bank shares fall more than 3 percent after it issues a profit warning, adding to concern it may have to raise capital and a gloomy mood around the eurozone amid fears that Spain will need a massive bailout.
Deutsche Bank said late on Tuesday that second quarter profits would be about 1 billion euros, about 400 million euros short of expectations due to the flagging euro and lower trading activity.
Analysts say that will add to pressure on the bank to raise capital to compete with rivals who have stronger balance sheets. Credit Suisse analysts said they saw an increased risk the bank will have to boost capital at a strategy day in September.
Deutsche Bank shares sag 3.5 percent to 22.68 euros. The European bank index firmed 0.9 percent, after slumping 7 percent in the last three trading sessions.
Rivals will report in the next few weeks, and are expected to show grim investment banking earnings and also the impact of a worsening economic backdrop for retail operations as concern grows about Spain’s borrowing costs and that it may need a full bailout.
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