Deutsche Bank scored higher in the European Banking Authority’s stress test this year than in 2014 in a sign that steps to bolster financial resilience are taking hold despite a tougher examination that took account of surging litigation costs.
Bloomberg News reports that the company’s common equity Tier 1 ratio fell to 7.8% in the adverse scenario, measuring resilience to economic shocks over a three-year period, from 11.1% at the end of 2015, the EBA said in a statement on its website on Friday in London.
Two years ago, the ratio - which measures equity as a share of assets weighted by risk -- fell to 7% from a starting point of 9.2%. The bank outperformed Barclays, whose CET1 ratio dropped to 7.3% in this year’s test, which used December 31 as a cutoff date.
CEO John Cryan has sought to reassure shareholders that his firm can meet future regulatory requirements without having to tap them for funds. Mounting legal costs as well as what Chief Financial Officer Marcus Schenck on Wednesday called potentially “draconian” changes to capital requirements have led some analysts to doubt the bank’s assertions.
To access the complete Bloomberg News article hit the link below: