Deutsche Bank Shares Lifted by CEO's Comments

By Monica Houston-Waesch

FRANKFURT--Deutsche Bank AG (DB) shares jumped Wednesday, coming back from recent lows after Chief Executive John Cryan sought to reassure investors about the German lender's capital strength.

At 0818 GMT, its shares were up 3.3% at EUR10.90.

Mr. Cryan told Germany's Bild newspaper that Deutsche Bank didn't need a capital increase or government assistance, broadly reiterating the bank's statement earlier this week.

"I never asked the chancellor for help, and never indicated anything of the kind," Mr. Cryan was quoted as saying.

Deutsche Bank shares had been battered in recent days by worries it could be overburdened by a looming fine from the U.S. Department of Justice related to its mortgage-securities investigation. The bank has confirmed that the DoJ made an initial proposal to settle for $14 billion, following a report by The Wall Street Journal last week. But the bank said fines generally come in well below the initial proposal.

Nevertheless, the prospect of a heavy fine, even one significantly less than $14 billion, sparked concern that the bank would require a capital increase or would have to make a plea for government assistance.

On Wednesday, a trader said the share had been "bombed out and oversold."

After plunging 7.5% in Europe on Monday, Deutsche Bank shares continued to go downhill into Tuesday afternoon, when they recovered after a DoJ official said penalties could be reduced for banks that cooperate in U.S. probes, without mentioning Deutsche Bank specifically.

Traders on Wednesday also said Deutsche Bank's $1.2 billion sale of Abbey Life to Phoenix Group Holdings was positive. Phoenix said two weeks ago it had been evaluating a deal to buy Abbey Life, but investors were worried that the U.K.'s vote to leave the European Union might complicate a deal, a trader said.

In the Bild interview, Mr. Cryan said restructuring at Deutsche Bank remains on track and that it is in a better capital position now than it was two years ago. "That's what counts," Mr. Cryan said.

-Write to Monica Houston-Waesch at [e-mail]

(END) Dow Jones Newswires

September 28, 2016 05:01 ET (09:01 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.