Bundesbank Grows Gloomier on Outlook for German Lenders

Germany’s banks are facing an even tougher outlook thanks to a combination of negative interest rates and a slowing domestic economy, the Bundesbank and rating agency Moody’s warned on Thursday. The rating agency cut its outlook for the German banking system from neutral to negative while the Bundesbank, the country’s central bank, has warned that the country’s financial stability is increasingly under threat, the Financial Times reported. The pessimistic forecasts come as Deutsche Bank and Commerzbank, having failed to merge earlier this year, have stepped up cost-cutting efforts in an attempt to improve profits. Over the first nine months of 2019, Deutsche Bank recorded €4.1bn of losses while Commerzbank’s profit over the same period fell 9 per cent from a year earlier to €684m. Across Germany’s wider banking sector, profits last year plunged 31 per cent, according to Bundesbank data. Read more