Bloomberg News reports that just 35% of the portfolio is classified as investment grade, Deutsche Bank said in a statement from Frankfurt on Friday. Gross loans account for $5.57bn of the total, while irrevocable lending commitments make up $3.3bn, it said.
“This portfolio is of lower quality compared to our overall corporate credit portfolio,” Deutsche Bank said. “Our strategy is to reduce this credit portfolio due to elevated risks of this industry.”
Banks around the globe are grappling with the fallout of declining commodities prices as cooling emerging-market growth undermines demand from steel to energy. Deutsche Bank’s mounting provisions for faulty loans risk eroding earnings already hurt by legal charges and restructuring costs tied to job losses.
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