Deutsche Bank shares and bonds sell off on Friday as investors grow wary of some European banks after Credit Suisse’s problems.
“Deutsche Bank is now under pressure. People are repositioning themselves and eliminating weak connections. People want to avoid anything that might come into focus,” said Jon Jonsson, credit portfolio manager at Neuberger Berman.
“I don’t think Deutsche Bank is immediately concerned, but things are moving pretty fast these days. It is certainly a bank that has struggled with profitability for a long time,” said Mr Jonsson.
Deutsche Bank shares were about 9% lower in German trading recently, falling for the third consecutive month. Shares in other European banks also fell. The bank’s US-listed shares lost more than 3%.
Deutsche Bank’s riskier debt also fell. One of its additional Tier 1 bonds was trading at an all-time low, according to Tradeweb data. Meanwhile, the cost of insuring Deutsche Bank debt against default, as measured by credit default swap prices, has continued a recent rise.
Five-year CDS on Deutsche Bank senior euro-denominated debt stood at 222 basis points as of Friday morning, up from 88 basis points at the start of the month, according to S&P Global Market Intelligence.