Jul 8, 2019

Behind Deutsche Bank's $8.3 billion revamp

Data: Investing.com; Chart: Axios Visuals

It was the long-expected end of an era for Deutsche Bank, as it announced Sunday it will pull out of its global equities sales and trading business, cut its dividend and slash risk-weighted assets by about 40% in some parts of the business, as part of a restructuring plan to save billions.

Our thought bubble as Axios' Felix Salmon points out: The "restructuring will cost 18,000 jobs and $8.3 billion, which is a lot of money for a bank valued at just $16.6 billion at close of trade on Friday."

  • The German bank also expects to report a net loss of $3.14 billion in the second quarter.
  • It will release its second quarter earnings on July 25.

What happened: Deutsche's struggles in equities and investment banking are not new. The company's stock tumbled during the financial crisis, after peaking at more than $145 a share in May 2007, and has never recovered.

  • The stock began mounting what looked like a rebound in July 2015, but in 2016 the company was hit with billions in fines from the U.S. Justice Department and lost all of that momentum. The stock closed at $8.03 Friday.

Go deeper: After Deutsche Bank cuts, where will the growth be?

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London Stock Exchange group in talks to purchase Refinitiv

Photo: Leon Neal/Getty Images

The London Stock Exchange Group (LSE) confirmed they are in talks to purchase Refinitiv Holdings, a financial data analytics company, for $27 billion including debt, reports Reuters.

Why it matters: Acquiring Refinitiv would make LSE a "global exchanges and data powerhouse," says the Financial Times. It would also establish the London Stock Exchange as Bloomberg LP's main contender.

Go deeperArrowJul 27, 2019

Citi's earnings return to pre-crisis levels, but shareholders aren't satisfied

Citi has been unwieldy, impossible to manage and too big to fail for well over 30 years. Post-crisis, however, it has effected an impressive transformation.

The big picture: Its earnings, unjuiced by the excess leverage of the early 2000s, have largely regained their pre-crisis levels — an impressive enough achievement even before you realize that the bank has shrunk considerably over the past decade.

Go deeperArrowAug 4, 2019

The extreme volatility in the Fed funds market

Data: Bloomberg, DB Global Research; Chart: Axios Visuals

Market participants overwhelmingly expect a 25 basis-point cut from the Fed at this month's policy meeting, but positioning has varied wildly over the last 2 months.

The big picture: Comments from Fed chair Jay Powell during a speech in Paris pushed the likelihood of a 50-point cut as high as 60% in mid-July, despite strong data prints on U.S. retail sales, unemployment and industrial production. Fed fund futures prices now show investors see just a 14% chance the central bank cuts rates by 50 basis points to a range of 1.75%–2.00%, according to data provided by Deutsche Bank Securities.

Go deeper: The case for a Fed rate cut

Keep ReadingArrowJul 24, 2019