Black Friday for Deutsche Bank as shares take big hit to tumble over 14%

London: Banking crisis now appears to blow out big in Europe as Deutsche Bank shares tumble over 14 per cent on Friday. The alarming drop is stock prices comes after the bank’s credit default swaps that insure against default shot up to a four-year high.

These intra-day movements in Deutsche Bank highlight fear among investors about the overall stability of the bank.

Around 01:13 pm GMT, Deutsche Bank shares (DBKGn.DE) were down 14.44 per cent at 7.99 euros, the third consecutive session of declines in Frankfurt for Germany’s biggest lender.

Other banking stocks also declined with the sector falling over 4.7 per cent.

Commerzbank was down 9.8 per cent, Societe Generale 7.7 per cent, Credit Suisse 6.9 per cent and UBS was down 6.7 per cent.

Last week was a tough ride for European banks with a state-backed rescue of Credit Suisse and crisis among banks in US fuelling concerns about the health of the global banking sector.

Also Read: Banking crisis: Is the whipsaw in Deutsche Bank shares pointing to trouble?

Meanwhile, as per the data from S&P, Deutsche Bank’s credit default swaps (CDS) – a form of insurance for bondholders – rose over 200 basis points (bps) – the most since early 2019 – from 142 bps mere two days ago.

Data by Refinitiv said Deutsche CDS had their largest intra-day gain on record on Thursday.

Meanwhile, some bonds of Deutsche Bank were also sold off. Its 7.5 per cent Additional Tier-1 dollar bonds fell nearly 3 cents to 72.868 cents on the dollar, pushing the yield up to 24 per cent. That yield is more than double what it was about two weeks ago, said Tradeweb data.

This week’s trading was one of the most volatile in a year. The STOXX 600 index of European banks – which does not include shares of Credit Suisse or UBS – which was last down 2.1 per cent, is heading for a monthly decline of 17 per cent.

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