S&P cuts troubled Deutsche Bank’s rating by a notch to BBB+

Deutsche Bank last month announced it would slash 7,000 jobs around the world as part of its revamp. (AFP)
Updated 01 June 2018
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S&P cuts troubled Deutsche Bank’s rating by a notch to BBB+

FRANKFURT: Ratings agency S&P on Friday downgraded German giant Deutsche Bank’s long-term credit rating from A- to BBB+, a day after a US banking regulator classified the firm’s American subsidiary as an at-risk institution.
Standard & Poor’s revised rating comes at a tumultuous time for Germany’s largest lender, whose newly appointed chief executive Christian Sewing has tried to reassure investors that Deutsche is ready to do what it takes to return to profitability after years of losses.
Deutsche last month announced it would slash 7,000 jobs around the world as part of its revamp.
“While we consider management is taking tough, although likely inevitable, actions and proposes a logical strategy to successfully restore the bank to more solid, sustainable profitability over the medium to long term, the bank appears set for a period of sustained underperformance compared with peers, many of whom have now finished restructuring,” Standard & Poor’s said in a statement.
“We see significant execution risks in the delivery of the (bank’s) updated strategy amid a continued unhelpful market backdrop, and we think that, relative to peers, Deutsche Bank will remain a negative outlier for some time,” it added.
S&P’s revision comes a day after the US Federal Deposit Insurance Commission classified Deutsche among its “problem banks.”
The Federal Reserve has also branded it as being in “troubled condition.”


Apple’s Cook to China: keep opening for sake of global economy

Updated 2 min 23 sec ago
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Apple’s Cook to China: keep opening for sake of global economy

  • Cook’s comments come as Apple weathers sinking sales in China
  • Despite official pledges and repeated assurances that China would continue to open its markets

BEIJING: Apple chief executive Tim Cook nudged China on Saturday to open up and said the future would depend on global collaboration, as the United States and China remained locked in a bitter trade dispute.
“We encourage China to continue to open up, we see that as essential, not only for China to reach its full potential, but for the global economy to thrive,” Cook said at a China Development Forum in Beijing.
Despite official pledges and repeated assurances that China would continue to open its markets, some analysts worry that its reform project has slowed or even stalled under President Xi Jinping, who has sought greater control over the economy and a bigger role for state-owned firms at the expense of the private sector.
Cook’s comments come as Apple weathers sinking sales in China because of a contracting smartphone market, increasing pressure from Chinese rivals, and slowing upgrade cycles. The company reported a revenue drop of 26 percent in the greater China region during the quarter ending in December.
Before those results came out, in a January letter to investors, Cook blamed the company’s poor China performance on trade tension between the United States and China, suggesting that pressure on the economy was hurting sales in China.