For real this time.
The German bank has promised to turn around its flagging fortunes for years, without much to show for it. Despite eking out a profit, the bank reported its weakest third-quarter revenue since 2010 today, pushing its shares down near an all-time record low. As Reuters succinctly described it, “After three years of losses, a failed stress test, several attempts to restructure, a leadership shake-up and a ratings downgrade, many investors have lost faith in Germany’s biggest bank, whose shares have fallen by 43 percent this year.”
Deutsche Bank remains one of the world’s largest banks by assets. The thing is, investors don’t trust the bank to use those assets wisely: Deutsche Bank trades at around 30% of book value, a damning assessment of the bank’s ability to destroy value. Put another way, investors reckon that a euro on the bank’s balance sheet is really only worth 30 cents. By contrast, JPMorgan trades at 160% of book value, Goldman Sachs at 100%, and Barclays at around 40%.