Madrid (EFE)
At 12:30 p.m., the titles of the German entity lost 13.3%, the largest drop among the large European banks, and the also German Commerzbank left 8.4%.
Deutsche Bank’s stock plunged after the bank announced it plans to write down $1.5 billion of subordinated debt on May 24, before it matures in 2028.
The bank assured that it has “all the required regulatory approvals” for that decision, but it caused a profound impact on the banking sector, which went into the red after it was known.
At the same time, the shares of the Italians Intesa and Unicredit lost 3.77% and 4.79%, respectively, those of Nordea (Norway), 9.7%; and those of the Dutch ING, 4.7%.
BNP Paribas and Société Générale, both from France, fall 6.7% and 8%.
In Spain, the two big ones, Santander and BBVA, fell 4.8% and 5%, respectively; CaixaBank, 3.7%; Sabadell, 6.8%; Bankinter, 5.5%; and Unicaja, 5.4%.
Some media point out that since last night the indicators on the risk of non-payment of Deutsche Bank’s subordinated debt, the so-called CDS (credit default swap), have risen sharply.
As explained by the manager IG, a CDS is a financial contract similar to insurance with which investors pay a premium to an entity that, in the event of non-payment of the insured bond, will pay the amount agreed in the contract.
The bankruptcy of Silicon Valley Bank (SVB) and the fall of Credit Suisse have introduced uncertainty in the stock markets about the financial sector and have generated a loss of confidence in the banks “more than a banking crisis”, it points out in a market report the director of investments of the Mutualidad de la Abogacía, Pedro del Pozo.
The entry The collapse of the Deutsche Bank stock market causes heavy losses for the entire sector was first published in EFE Noticias.