What, me worry?
Josef Ackermann, the ever-optimistic CEO of Deutsche Bank AG, Germany's biggest bank, told employees in a widely reported Nov. 21 letter that "nothing justifies the extremely low price of our shares -- not possible losses nor a potential need for new capital." The lender's shares have fallen by more than 50% in the past six months. Still, the über-executive said he would refocus bank activities to appease shareholder concerns.
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Ackermann is famous in Germany for first helping create the country's €560 billion ($718 billion) financial services bailout and then telling everyone he'd be embarrassed to tap it. In the letter, Ackermann said he'd rely on more traditional measures to keep the bank chugging, such as the 900 employees he's letting go at the investment banking unit (reportedly the most severe layoff ever at the unit) and selling its treasury shares, which are currently worth €334 million. Analysts have said the lender may need up to €9 billion to put its Tier 1 ratio at an Ackermann-promised 10%.
Investors, cheered by the U.S. bailout of Citigroup Inc., seem to believe him -- Deutsche's shares gained 7.2%, or €1.35, in afternoon Frankfurt trade to €20.15, valuing the company at €11.5 billion.
- Andrew Bulkeley
