Deutsche Bank was confused with the European Central Bank for fear that the German Credit Institute could underestimate how risky would be risky, said for the Financial Times.
The ECB has repeatedly expressed concern about Deutsche’s credit risk management and its risk assessment methods.
Deutsche ultimately released two warnings to investors that allocations for bad loans will 2024. be more than originally estimated 1.5 billion euros.
He reported allocations of 1.8 billion euros for 2024, which was more than in 2023, to expect only “partial stabilization” of credit losses in 2025. The largest German bank for potential losses from the total loan portfolio of 485 billion euros, is written Seebiz.
Deutsche also announced, in the middle of warnings about bad loans, that his chief director for the risks, Olivier Vigner, leave the function after only one three-year term in the bank. It is planned to go to May, when a contract emphasizes him.
ECB’s concerns have expanded to its supervision of the bank’s financial operations involving the financial lever, which dates back to 2020. year, when Deutsche rejected the request to reduce their activities after the Leafudies audit in the entire sector.
The second source stated that the ECB questioned the internal expectations of Deutsche for losses from the loan in 2024, which then amounted to 1.5 billion euros, suggesting that the more realized amount was closer to 2.5 billion euros.
Deutsche refused that request, claiming that his auditor would not accept such a high level of reservation, because the tax authorities dispute that decision as they would reduce the bank’s profit, and thus its tax account.
The second source told the FT that the ECB was originally signaling to potentially increase the individual capital of the Bank – its so-called Pillar 2 – significantly more than 25 base points that in the end, due to the Bank Management.
The German bank has successfully lobbied the limitation of that increase, added the source.
The third referent interlocutor said that the difference in attitudes between the Bank and the ECB decreased over time.
Deutsche said to lead “permanent and constructive dialogue with our regulators”, adding that the topics of the conversation included “risk management and access to their feedback”.
The Bank said that this is “the usual business process through the entire industry” and that “feels safe” in connection with its risk management and reservation methods, which confirmed its auditors.
