Germany

Deutsche Bank has scaled up plans to shift hundreds of billions of assets from London to Frankfurt after coming under increasing pressure from European regulators over the size and complexity of its UK operations after Brexit, the Financial Times reported. Deutsche could eventually move about three-quarters of its estimated €600bn balance sheet back home.

Deutsche Bank AG is weighing a move to split its core businesses under a holding company, a measure that would make it easier to break up in a crisis and more agile in potential mergers, according to people with knowledge of the discussions, Bloomberg News reported. The bank has been encouraged by regulators to adopt the structure, which could create three largely independent core divisions overseen by common management, the people said, asking not to be identified as the deliberations are private.

Two of the most storied names in German department stores are combining in a deal orchestrated by an Austrian real estate billionaire, highlighting the pressures facing traditional retailers amid the rise of Amazon.com Inc. Karstadt, controlled by Rene Benko’s Signa Holding GmbH, agreed to take over Galeria Kaufhof, owned by Saks Fifth Avenue parent Hudson’s Bay Co., creating a retail company with 5.4 billion euros ($6.3 billion) in revenue, Bloomberg News reported. Benko has long wanted to merge the brands, having had an overture rejected as recently as February.

Deutsche Bank is set to lose as much as €200m in revenue a year unless chief executive Christian Sewing can reverse a recent surge in funding costs, the Financial Times reported. Executives have made reducing the cost of issuing debt a top priority after a chastening summer for the German lender, people familiar with their thinking said. The push comes after its credit rating was downgraded, its shares continued to tumble and the price of insuring its debt doubled on fears of contagion from political crises in Italy and Turkey.

Germany’s trade surplus narrowed in July to its smallest level in more than four years, as exports slipped while imports jumped during a period of escalating trade tensions that has seen the EU targeted by US tariffs. The data from the Federal Statistics Office (Destatis), which showed the foreign trade balance dropped by €3.2bn to a €15.8bn surplus in calendar and seasonally-adjusted terms, is the latest indication of weakness in the export-driven economy of the eurozone’s powerhouse, the Financial Times reported. Germany has not run a smaller surplus since March 2014.

Just in case you needed another sign that Germany’s factory sector hit a rough patch this summer: manufacturing orders in the eurozone’s largest economy posted a surprise dip in July, according to new data released on Thursday, the Financial Times reported. New orders in manufacturing fell 0.9 per cent in July from June, according to the Federal Statistics Office. The reading was substantially worse than the 1.8 per cent rise that was forecast by economists in a Reuters poll. The figure was also down 0.9 per cent on a year-on-year basis.

The German government is considering providing emergency financial assistance to Turkey as concerns grow in Berlin that a full-blown economic crisis could destabilize the region, German and European officials said. While the talks are at an early stage and may not result in any aid, the possibilities being discussed range from a coordinated European bailout similar to the kind deployed during the eurozone debt crisis to project-specific loans by state-controlled development banks and bilateral aid, The Wall Street Journal reported.

Deutsche Bank said Saturday that it is acting on its own to buy bonds of Noble Group Ltd, days before a crucial shareholder vote on a $3.5 billion restructuring of the Singapore-listed commodity trader, The Wall Street Journal reported. The confirmation comes a day after The Wall Street Journal reported the bank’s unexpected offer to buy the bonds. It wasn’t clear on Friday if Deutsche Bank was acting on behalf of another company or for itself, as banks typically handle bond tenders like this for clients.

Italian households suffered a much larger loss of income than their German counterparts due to the European Central Bank’s ultralow interest rates, according to an ECB report that appears to dispel some German concerns over the bank’s easy-money policies, The Wall Street Journal reported. German officials have frequently criticized the ECB for hurting the nation’s savers and subsidizing highly-indebted households in southern Europe by introducing low interest rates.

A sharp fall in German manufacturing output in June has fuelled concern that a global trade war has deepened an export-led slowdown in the eurozone. Official figures published on Monday showed that the value of new orders placed with German manufacturers fell by 4 per cent between May and June, as overseas demand plunged, the Financial Times reported. The biggest monthly fall since the beginning of 2017 led the country’s economy ministry to state that trade tensions were hitting exports.