With the recent Deutsche Bank upheaval which could be a reminiscent of the Lehman crisis. Have decided to read up more and here are some of my findings.
Let’s look at some statistics first.
Price- 13.5 USD
DB market Cap- 18.5 billion USD
Potential Fine from DOJ- 14 billion (Fine for their part in selling toxic mortgage backed securities during Lehman’s time)
Derivatives Exposure: 42 trillion
Price to Book: 0.25
Latest Year End Loss: 6.8 billion Euros
Debt to Equity: 2.8
The current worries of the market are mainly due to the fine and also huge derivatives exposure as it beats the exposure Lehman (85 billion) had heads down. There have been talk that the fine could be negotiated down and a rumored amount of 5.4 billion was spreading through the grapevine and this caused a positive surge for DB shares.
Let’s first look at …