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Deutsche Bank lined up for credit downgrade

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Deutsche Bank lined up for credit downgrade
Photo: DPA
08:23 CEST+02:00
Credit rating agency Fitch has downgraded two German banks and is conducting a comprehensive review of other banks, including Deutsche Bank, with a view to reducing their ratings too.

Die Welt newspaper reported on Friday that the Landesbank Berlin and Berlin-Hannoversche Hypothekenbank have been knocked down one notch from AA- to and A+ rating, as well as Swiss bank UBS, pushed down from an A+ to an A rating.

Now Fitch has put Deutsche Bank on notice that it could be next - along with French banks Crédit Agricole and BNP Paribas, Swiss bank Credit Suisse as well as the American institutes Goldman Sachs and Morgan Stanley.

The downgrades are significant because they show that experts are increasingly concerned that even major banks in the United States and Europe could be threatened by the brewing financial crisis.

Repeated profit warnings from Deutsche Bank as other financial institutions are not helping matters.

In a statement, Fitch blamed Deutsche Bank's investment banking division for contributing to the bank's financial problems, according to the Business Wire news service.

It acknowledged, however, that while the bank was affected by Europe's growing sovereign debt crisis, it had made moves to reduce its risk and would likely see its position in the retail banking sector continue to improve – things which could mitigate its problems.

The Local/mdm

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