Research Update: Deutsche Bank Ratings Affirmed On Restructuring Process, Outlook To Negative On Deepening COVID-19 Risks

Despite governments' measures to contain the COVID-19 pandemic, European economies, including Germany and others that Deutsche Bank is exposed to, face an unprecedented challenge. Under our base case of an economic recovery starting in third-quarter 2020, through end-2020 and into 2021, we expect the bank's earnings, asset quality, and capitalization to be weaker than we previously envisaged. We are revising the outlook on the bank and its core operating subsidiaries to negative, but affirming our 'BBB+/A-2' issuer credit ratings because we expect the bank to emerge from this deep, but short-term cyclical downturn with a reasonably resilient balance sheet and a more efficient and focused business and operating model. The negative outlook acknowledges the downside risks we see to this

...- Despite governments' measures to contain the COVID-19 pandemic, European economies, including Germany and others that Deutsche Bank is exposed to, face an unprecedented challenge. - Under our base case of an economic recovery starting in third-quarter 2020, through end-2020 and into 2021, we expect the bank's earnings, asset quality, and capitalization to be weaker than we previously envisaged. - We are revising the outlook on the bank and its core operating subsidiaries to negative, but affirming our '###+/A-2' issuer credit ratings because we expect the bank to emerge from this deep, but short-term cyclical downturn with a reasonably resilient balance sheet and a more efficient and focused business and operating model. - The negative outlook acknowledges the downside risks we see to this base case, under which the bank's revenue base and asset quality would come under greater strain if economic recovery is significantly delayed, thereby threatening the execution of the restructuring...

Research Update