Business World

Thursday 22 August 2019

Deutsche Bank value crashes to near AIB's

'Yesterday Deutsche Bank shares fell to a record low - to value the massive bank at just €12.36bn - a quarter of what it was five years ago.' Stock photo: PA
'Yesterday Deutsche Bank shares fell to a record low - to value the massive bank at just €12.36bn - a quarter of what it was five years ago.' Stock photo: PA
Donal O'Donovan

Donal O'Donovan

A collapse in the price of Deutsche Bank shares means the German giant is now worth just €2.4bn more than AIB, despite ranking as one of the most important banks in the global financial system.

Germany's biggest lender has been plagued by a collapsed attempt to merge with home market rival Commerzbank, failed regulatory tests, ratings downgrades, massive fines and management upheavals.

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Yesterday Deutsche Bank shares fell to a record low - to value the massive bank at just €12.36bn - a quarter of what it was five years ago and not much bigger than AIB, valued at €9.9bn based on share prices yesterday.

Deutsche Bank's balance sheet of around €1.4trn, dwarfs AIB's €91.5bn.

Ironically, in 2014, the market capitalisations of the two banks were frequently compared to illustrate the so-called AIB 'eejit trade' a wild over-valuation of the Irish bank as a result of small shareholders buying the millions of its shares that constituted its tiny free float following nationalisation. At one stage it led to AIB being valued as 25pc bigger than Deutsche Bank. This time the two are approaching parity as confidence in Deutsche Bank has come under massive strain.

CEO Christian Sewing has promised to present a new restructuring plan in a bid to restore market confidence.

Irish Independent

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