Italy’s PM Unloads On Deutsche Bank’s Unfixable Problem: “Hundreds And Hundreds Of Billions Of Derivatives”

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After a tumultuous week for Deutsche Bank which saw the DOJ demand a $14 billion settlement for the bank’s past RMBS transgressions, it was another bad day for the giant German lender, whose stock and contingent converts tumbled after the investing community realized that even a modest $5.5 billion final settlement would leave it perilously undercapitalized and likely scrambling to raise more cash.

As SocGen’s Andrew Lim calculated, Germany’s biggest bank would be “significantly undercapitalized” even if an eventual settlement with the DoJ can be covered by the bank’s reserves. Any settlement above €5.4 billion would imply a capital increase is needed just to pay the fine, he wrote. Continue reading

Wells Fargo Reduces 66% of Credit Lines to Oil and Gas Players

Around 66 percent of Wells Fargo’s credit lines to energy exploration and production companies have been reduced as a result of the two-year drop in oil prices, The Street reported.

The E&P loans make up more than half of the San Francisco-based bank’s US$17.8 billion in loans to oil and gas ventures. Just under half of the outstanding loans have been vetted so far, according to a presentation by CFO John Shrewsberry on Tuesday. Continue reading