Deutsche Bank may have its credit rating cut by Moody’s Investors Service on concern that the bank will struggle to carry out an overhaul and improve profit.
“Since changing leadership last June and recalibrating its strategic plan last November, the operating environment has worsened for Deutsche Bank,” the ratings firm said in a statement Monday, announcing the review. “This is increasing the already high level of execution challenges the group faces in addressing its structural cost issues and achieving its new strategic plan.”
Bloomberg News reports that John Cryan, the bank’s co-chief executive officer, said last week that he doesn’t expect to report a profit this year as he pushes forward with the plan to cut jobs and dispose of assets. Record-low interest rates, slumping energy prices, cooling emerging-market growth and mounting legal claims over the firm’s past misconduct have undermined his efforts, sapping equity reserves and contributing to the first annual loss since 2008 last year.
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