Deutsche Bank Says It’s Bulletproof While Credit Markets Shake
As warning signs flash across global credit markets, Deutsche Bank is making it clear it doesn’t share the growing sense of alarm.
While some of its Wall Street peers hint that hidden risks are bubbling beneath the surface, Germany’s largest lender insists its loan book remains in strong shape.
Chief Executive Christian Sewing struck a confident tone during an interview with Bloomberg Television, saying that the bank has seen “no signs of deterioration” in its credit portfolio. The message is aimed at calming investors unnerved by a series of high-profile corporate collapses in the U.S. that have shaken confidence in the broader lending environment.
Those failures include Tricolor Holdings, a subprime auto lender whose downfall left investors with deep losses, and First Brands Group, an auto parts supplier that defaulted on more than $10 billion in debt. The sudden blowups have reignited debate over the growing private credit market, a rapidly expanding corner of finance often dubbed “shadow banking” because of its limited regulatory oversight.
The mood in the industry has grown tense. JPMorgan Chase chief Jamie Dimon warned earlier this week that these isolated collapses could be early signs of a broader problem. Using his trademark bluntness, he compared the situation to finding a single cockroach in a kitchen – rarely the only one.
Sewing dismissed that kind of anxiety as premature, saying that while an eventual recession could alter the outlook, it’s “not something we’re discussing internally right now.” The executive’s optimism reflects Deutsche Bank’s ongoing efforts to convince investors that years of restructuring have left it less exposed to risky lending than in the past.
Still, credit analysts are watching closely. Rising interest rates have squeezed heavily indebted borrowers worldwide, and private lenders now hold trillions in loans outside the traditional banking system. If defaults accelerate, even well-capitalized institutions could face spillover effects.
For now, Deutsche Bank is choosing confidence over caution – a rare stance in a financial sector increasingly bracing for the next round of credit stress.
Source: Bloomberg
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