Deutsche Bank, Germany's biggest lender, today tried to reassure investors and staff that it has sufficient cash to pay its riskiest debts as its shares took a another hammering along with banking stocks around the world.
In a short statement late yesterday and subsequently in a letter to employees today, the bank -- whose shares have plummeted by nearly 40 percent since the beginning of the year -- said that it is financially "rock solid" and has more-than-sufficient means to pay coupons on its riskiest debt both this year and next year.
Deutsche Bank's new chief executive, John Cryan, who was brought in to steer the group out of its current woes, acknowledged in the letter to employees that volatility on the stock markets was having an impact on earnings.
"Volatility in the fourth quarter impacted the earnings of most major banks, especially those in Europe," Cryan wrote.
But Deutsche Bank "remains absolutely rock-solid, given our strong capital and risk position," he insisted.
"On Monday, we took advantage of this strength to reassure the market of our capacity and commitment to pay coupons to investors who hold our Additional Tier 1 capital. This type of instrument has been the subject of recent market concern," Cryan said.
Deutsche Bank also got verbal backing from German Finance Minister Wolfgang Schaeuble, who told Bloomberg Television on today: "No, I have no concerns about Deutsche Bank." He did not elaborate.
But the reassurances did not seem to be having much effect on investors, who continued to sell off Deutsche Bank's stock.
On the Frankfurt stock exchange today, Deutsche Bank shares were among the biggest losers, shedding 4.3 per cent to close at 13.23 euros.
Markets also appear to be concerned about the huge legal bills Deutsche Bank may be facing as its battles as many as 6,000 different litigation cases.
"The market also expressed some concern about the adequacy of our legal provisions but I don't share that concern. We will almost certainly have to add to our legal provisions this year but this is already accounted for in our financial plan," he said.
In its statement late yesterday, Deutsche Bank said that its "2016 payment capacity is estimated to be approximately USD 1.1 billion", sufficient to pay so-called additional tier 1 (AT1) coupons of approximately 350 million euros on April 30.
