Deutsche Completes Auction of Equity Derivatives Portfolio

Zacks Equity Research

Moving ahead with its major overhaul plans, Deutsche Bank AG DB has auctioned portfolios of equity derivatives after dividing the same into three groups — European, Asian and U.S. books. The news was reported by Bloomberg.

This auction is first among many more to be completed. It basically involved flow equity derivatives. Per the article, the second auction is likely to involve exotic derivatives, the sale of which is expected to be quite complex.  

European assets were acquired by Barclays Plc BCS, while Goldman Sachs GS placed the winning bid for Asian equity assets. Further, Morgan Stanley MS purchased the U.S. trades.

Per restructuring plans announced in July, the bank is making progress in exiting equities-trading business, with a view to counter rising costs and falling bottom line. Notably, a major part of assets held previously in the stocks trading division is now placed in a capital release unit, which will ensure their smooth winding down.

Though Deutsche Bank’s restructuring efforts like cost-saving measures look encouraging, it is really difficult to determine how much the bank will gain, considering the lingering headwinds.

Recently, the bank came under scrutiny of U.S. regulators regarding its dealings with Russian oligarchs. It was alleged that the staff reported concerns about new and existing Russian clients and transactions, but it was not addressed by the seniors.

However, the sources said that the probe is in early stage and it is not confirmed whether any action will be taken against the bank.

Shares of Deutsche Bank have lost 8.1% on the NYSE in the past six months compared with the industry’s decline of 7.8%.

The stock currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Just Released: Zacks’ 7 Best Stocks for Today

Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.6% per year.

These 7 were selected because of their superior potential for immediate breakout.

See these time-sensitive tickers now >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Barclays PLC (BCS) : Free Stock Analysis Report
 
Deutsche Bank Aktiengesellschaft (DB) : Free Stock Analysis Report
 
Morgan Stanley (MS) : Free Stock Analysis Report
 
The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research