Deutsche Bank AG will probably see revenue from debt trading come under pressure, compromising a key strategy, should the European Central Bank announce quantitative easing measures to bolster the economy, Bank of America Corp. said.
Deutsche Bank AG is betting its 8 billion-euro ($11 billion) capital increase will help it grab market share in fixed income as a slump in trading prompts competitors including Barclays Plc to retreat.
Royal Bank of Scotland Group Plc, Britain’s biggest government-owned lender, fell in London trading after Chief Executive Officer Stephen Hester quit and the company started to cut 2,000 investment-banking jobs.
German officials seeking to bolster confidence in the financial system by releasing the results of banking stress tests may heed calls to shine a light into the accounts of Germany’s state-owned lenders.
Chancellor of the Exchequer George Osborne said lenders need to share the pain of tax increases as he announced a levy on lenders’ balance sheets. Investors and analysts say banks have dodged a bullet.