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

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.”


Sales of grounded Boeing jets lift off at Dubai Airshow

Updated 27 min 39 sec ago

Sales of grounded Boeing jets lift off at Dubai Airshow

  • Saudi Arabian budget airline Flynas confirms deal to buy ten long-range Airbus narrow-body planes

DUBAI: Boeing’s 737 MAX took center stage at the Dubai Airshow on Tuesday as airlines announced plans to order up to 50 of the jets worth $6 billion at list prices despite a global grounding in place since March.

Kazakhstan flag carrier Air Astana said it had signed a letter of intent to order 30 Boeing 737 MAX 8 jets for its Fly Arystana subsidiary.

Air Astana, which operates Airbus and Embraer jets in its main network, said it was confident in Boeing’s ability to resolve problems with the MAX.

Global regulators banned commercial flights of Boeing’s fastest-selling jet in March after two fatal accidents.

Plans for the jet’s return to commercial service have been pushed back to early 2020 as Boeing finalizes software and training revisions that need regulatory approval.

“We are making flying affordable for the people of Kazakhstan,” Air Astana Chief Planning Officer Alma Aliguzhinova said, adding that budget carrier Fly Arystana would start taking the jets in late 2021.

The airline plans to hold 15 aircraft directly and may finance the rest through a lease transaction, she said, adding that Air Astana would not change the composition of its main fleet.

Separately, another airline signed a firm order for 10 Boeing 737 MAX 7 and 10 Boeing MAX 10 jets, a person familiar with the matter said. The airline’s name was not disclosed.

Boeing has used the past two major industry events to try to secure market momentum for the grounded MAX, which is seen as key to the planemaker’s financial health over the coming decade.

A letter of intent between Boeing and British Airways owner IAG for 200 jets, which grabbed the spotlight at the Paris Airshow in June, has yet to be finalized as the European holding company discusses the fleet change with subsidiaries that use Airbus for medium-haul operations.

In other business coinciding with the largest Middle East air show on Tuesday, Saudi budget airline Flynas agreed to buy 10 long-range Airbus A321XLR jets.

The airline’s chief executive had said on Monday that Flynas was in talks to exercise purchasing options for some or all of 40 Airbus A320neo narrow-body jets.. Airbus unveiled a provisional order in Dubai for eight of its small A220 jets from Air Senegal. Britain’s easyJet exercised options for 12 more Airbus A320neo aircraft.

Also coinciding with the show, leasing giant GECAS was expected to confirm an order for 25 Airbus planes, including 12 A330neo jets powered by engines from Rolls-Royce, a competitor to GECAS parent company General Electric.

However, there were no immediate signs that Dubai’s Emirates was ready to finalize a provisional order for 40 Boeing 787 Dreamliners.