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Wednesday 28 September 2016 11:48 am

Deutsche Bank: Where did it all go wrong?

By: Jake Cordell

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The German government could be considering a bailout for Deutsche Bank as the lender's share price falls to its lowest level since the mid-1980s and speculation over a rights issue or buyout swirl. 

The latest trigger has been the Department of Justice's claims for a $14bn settlement over Deutsche Bank's role in the underwriting of mortgage-backed securities in the run-up to the financial crisis.

However, the list of troubles extends behind a few multi-billion dollar litigation claims, with the bank's business model under severe pressure in the low interest rate environment and regulators keeping a close eye on its capital buffers.

Talk of Lehman Brothers bubbles beneath the surface, and European politicians and financiers are wondering what to do about the state of Deutsche Bank.

Here's a snapshot of what's gone wrong for the lender since CEO John Cryan took over the reins in July 2015.

A snapshot: Deutsche Bank's annus horribilis

July 2015: British John Cryan takes over the reins as CEO at Deutsche Bank

August 2015: Shares look relatively healthy, trading at €31 and the prospect of interest rate rises in both the US and the UK are on the cards

September 2015 : Reports suggest Deutsche Bank will withdraw from Russia and announce 23,000 lay-offs, equivalent to one-quarter of its workforce

October 2015: Dividend scrapped, 10 countries quit, at least 15,000 jobs lost at Deutsche Bank shocks the markets with a €6bn loss for the third quarter. Stock price hits €25.

November 2015: Fined more than $250m by US regulators for violating sanctions

December 2015: US Federal Reserve hikes interest rates – a rare piece of good news for the banking sector – as Deutsche Bank eases back from China

January 2016: Full-year losses reported at €6.8bn for 2015. Shares slump to lowest ever level of around €13.

February 2016: Turmoil on the global markets hits banks worst than most as shares plumb new record lows.

March 2016: European Central Bank (ECB) announces extension of monetary stimulus as end to negative interest rates stretches further into the distance and stock market rout continues

April 2016: Germany lender reports the most challenging quarter in "several decades" as revenues dropped 22 per cent and profits were down 58 per cent. Shares recover to around €16.

May 2016: Shareholder rebellion at Deutsche Bank AGM as more than half of investors reject the bank's remuneration plans in a non-binding vote.

June 2016: Deutsche Bank fails the US Federal Reserve's stress test and the UK votes to leave the EU, hitting banks across the continent

July 2016: Pre-tax profits fall 67 per cent in the first half of the year. European Banking Authority (EBA) stress tests reveal further weakness at the bank, but do not issue a 'pass' or 'fail' rating.

August 2016: Kicked out of the Eurostoxx 500 as share price languishes at all-time low of €11.40, and the Bank of England cuts interest rates to 0.25 per cent.

September 2016: US Department of Justice asks Deutsche Bank to pay $14bn over mortgage-backed securities claims, prompting another mass sell-off of shares and raising speculation over a bailout by the German government

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