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Deutsche Bank's CEO is doubling down on defense investment
Deutsche Bank's CEO is doubling down on defense investment

CNBC

time24-06-2025

  • Business
  • CNBC

Deutsche Bank's CEO is doubling down on defense investment

Deutsche Bank is doubling down on defense investment as a broader European drive to rearm unlocks fresh capital in the region. Speaking to CNBC's Annette Weisbach at the Tag der Industrie conference in Berlin on Monday, Deutsche Bank CEO Christian Sewing said that the German lender has increased its exposure to the defense industry to the tune of "double-digit billion" euros. "We have actually sized up not only our portfolio appetite, but also the resources we bring in in order to advise our clients," he said. Speaking more broadly about the industry, Sewing noted that "we have clearly, in particular on the European side, been under investing," stressing that "defense is one of the core topics for a country, [and] I think we are always underestimating what the positive impact of defense spending is." His comments come on the week of a key NATO summit in which members are looking to potentially agree increase their defense contribution spending target to 5%. NATO members have reportedly agreed to this hike in principle ahead of an annual summit this week, with Spain emerging as an outlier. U.S. President Donald Trump started floating the idea back in January, as he called on fellow members of the alliance take more responsibility for their own security. Since then, the EU has pledged to mobilize 800 billion euros ($928 billion) to help member countries "massively boost its defense spending," while the U.K. has also vowed to up its own expenditure, and Germany's parliament passed a historic reform that paved the way for greater investment in national security. Sewing said that Deutsche Bank must now work with with public institutions to see how to leverage governmental funds. "At the end of the day, the money needs to go to the mid cap and the supplier companies," he said. "And here we need to work smartly with institutions like [development bank] KfW or [the European Investment Bank]." Sewing said that if the EU "finally work[s] on" the capital markets union — its plan to create a single market for capital to allow investments and savings to flow freely across the bloc — Deutsche Bank and its partners will be "well prepared to finance" defense expenditure. The German lender's chief agreed that the mood in Europe had catalyzed momentum among defense startups in the region, noting that the EU's determination to hike defense spending could act as a stimulus for innovation. He argued that the ingenuity underpinning California's Silicon Valley is partly the result of the United States' long-standing willingness to invest in defense. European defense stocks have been on a bull run for most of the year amid the broader spending drive, with many market watchers seeing further upside ahead. The Stoxx Europe Aerospace and Defense index is up by almost 50% year-to-date, with some companies in the sector almost doubling in value. As of the Monday settlement, German tank parts manufacturer Renk has seen its shares surge 259% since the beginning of the year. During that time, German defense giant Rheinmetall's stock jumped 183%, while Germany's Hensoldt popped 168%. In a Tuesday note, Deutsche Bank strategists raised their target price on Airbus, giving the stock a "buy" rating and touting the 5% NATO target as a move that would soon be "benefiting defence companies." "The US is shifting its focus to the Indo-Pacific region, creating a capability gap in Europe for transport, tanker aircraft and helicopters, which Airbus Defence and Space (ADS) is well-positioned to fill," they said. "ADS's growth and profitability are expected to materialise post-2028, precisely when Airbus Commercial may reach a plateau. Further, Airbus remains affordable compared to both commercial and defence peers." In a June 10 note, meanwhile, the lender's analysts said Europe has "a rare opportunity to capitalise on the evolving global landscape." "With inflation pressures easing and a fresh wave of defence and industrial stimulus gaining traction, economic momentum is gradually returning," they said. At the European Defence and Security Summit in Brussels earlier this month, the EIB announced it would loan Deutsche Bank 500 million euros to facilitate the provision of financing for small and medium-sized businesses working in the EU's security and defense supply chain. The funding will also be accessible for military and police infrastructure, such as training facilities.

Deutsche Bank's deal-making business weaker than expected, CEO says
Deutsche Bank's deal-making business weaker than expected, CEO says

Business Times

time12-06-2025

  • Business
  • Business Times

Deutsche Bank's deal-making business weaker than expected, CEO says

[FRANKFURT] Deutsche Bank's origination and advisory business is not as strong as the German bank had expected, with companies postponing decisions due to the US' tariff policies, the bank's chief executive officer Christian Sewing said on Thursday (Jun 12). He said at a financial conference that the deal-making business would be weaker in the second quarter than executives had planned for at the start of 2025. 'Will it be weaker than we initially thought? Yes. But, to be honest, we talk about a lot of delayed, but not cancelled, deals,' he said. Deal-making has slowed this year as US President Donald Trump's tariffs on trading partners fanned turmoil in markets and sparked concerns about slowing economic growth. Other big banks, including Bank of America, have also warned of a slowdown in the business. For Deutsche, the so-called origination and advisory revenue, after making big gains in recent quarters, fell by 8 per cent in the first quarter. Sewing said that revenue in the investment bank's much larger fixed-income and currency business will be up in the second quarter, compared with the previous year. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up He said he was optimistic about Deutsche's other business lines, such as its corporate and retail banks, and that the bank was sticking to its targets. This is a crucial year for Deutsche Bank, Germany's largest lender, as it faces a deadline to meet ambitious goals on costs and profitability. Asked about the prospect of mergers and acquisitions as banks in Italy and Spain weigh consolidation, Sewing replied that Deutsche 'can grow organically'. 'I'm not looking so much at consolidation for Deutsche Bank,' he said. REUTERS

Deutsche Bank plans SRT deal tied to US$3 billion corporate loans
Deutsche Bank plans SRT deal tied to US$3 billion corporate loans

Business Times

time23-05-2025

  • Business
  • Business Times

Deutsche Bank plans SRT deal tied to US$3 billion corporate loans

[BERLIN] Deutsche Bank is selling a significant risk transfer (SRT) linked to a portfolio of US$3 billion in corporate loans, according to people with knowledge of the matter, the latest deal to drive this market toward record volumes this year. The size of the SRT is around 8 per cent of the portfolio, or about US$240 million, with the loans in both North America and Europe, the people said. The notes will form part of the lender's Craft programme, they added, asking not to be identified because the deal is private. A representative for Deutsche Bank declined to comment. SRTs allow banks to essentially buy insurance on debt, freeing up capital, while still keeping the assets on their balance sheets. The transactions involve selling notes to funds in exchange for yields that can frequently top 10 per cent, with the investors agreeing to absorb some losses if the loans go bad. Other European banks currently discussing SRT deals include Banco Santander, BNP Paribas and UniCredit. Demand for such instruments remains largely unaffected by the recent bout of volatility in public financial markets. In March, Deutsche Bank priced a US$560 million SRT deal out of its Craft programme at a spread of 750 basis points over the secured overnight financing rate, data compiled by Bloomberg show. The lender also priced an SRT deal tied to a portfolio of loans to German mid-cap companies, chief executive officer Christian Sewing said on an April 29 earnings call. 'There was also no noticeable repricing required. So, actually, there is a lot of demand,' said Sewing on the call, replying to a question about the potential impact of economic uncertainties on demand for SRTs. SRT are among the tools Deutsche Bank is using for its plan to reduce its risk weighted assets by 25 billion euros (S$36.4 billion) to 30 billion euros by the end of the year, a goal the lender may 'overachieve,' Sewing told analysts. The rising popularity of SRTs means deals may hit record volumes this year. Chorus Capital Management, which invests in SRTs, projects global issuance to grow to as much as US$35 billion, compared with an estimated US$29 billion last year, with the lion's share taking place in Europe. UniCredit is working on at least three SRTs tied to loan portfolios totalling around 4.2 billion euros, while Santander is discussing another three to offload risk from its loan portfolios in Spain, Denmark and the UK. BNP Paribas is also in talks to sell an SRT linked to a portfolio of about 10 billion euros in corporate loans. BLOOMBERG

Deutsche Bank posts 39% rise in Q1 profit but tariffs weigh
Deutsche Bank posts 39% rise in Q1 profit but tariffs weigh

RTÉ News​

time29-04-2025

  • Business
  • RTÉ News​

Deutsche Bank posts 39% rise in Q1 profit but tariffs weigh

Deutsche Bank has today posted a 39% rise in first-quarter profit after its global investment banking division generated a big increase in revenue in bond and currency trading during volatile markets. The profit increase comes despite a writedown for a leveraged-finance deal and the bank's additional provisions for the possible impact of tariffs on clients. Germany's largest lender recorded net profit attributable to shareholders of €1.78 billion in the quarter, compared to €1.28 billion a year earlier, and exceeding analysts' expectations of €1.64 billion. The figures kick off a crucial year for Deutsche as it winds up a three-year plan and attempts to meet a series of targets that some analysts deem overly ambitious. The results "put us on track for delivery on all our 2025 targets," CEO Christian Sewing said. Sewing, who was awarded another term as the bank's CEO in March, is in the process of tweaking the bank's strategy and formulating targets for next year and beyond. With the first-quarter results, Deutsche has now cumulatively earned more in profit than it has lost over the last 10 years, and has made up for the hefty losses it posted between the years 2015 and 2019. Revenue in its fixed-income and currency trading, one of the bank's largest businesses, rose 17%, better than expectations for a 10.3% gain. Origination and advisory, after making big gains in recent quarters, saw an 8% drop in revenue. It posted a €90m writedown for an unnamed position in its leveraged finance business. Deutsche is one of several big European banks publishing its quarterly report card this week after a slew of strong earnings from their US counterparts. After US President Donald Trump unleashed a global trade war earlier this month, investors are watching how banks plan to navigate an anticipated slowdown in economic growth that could hit loan demand and their customers' financial health. "We have taken additional provisions to cover higher macroeconomic uncertainties caused by the tariff discussions and, as a result, our overall provisions were higher year-on-year," Sewing wrote in a memo to staff. Deutsche operates from Sydney to New York, but the economy of its important home market in Germany has been stagnating. The nation's top central banker warned last week that the German economy, Europe's largest, faces a possible slight recession in 2025, something that could eat into banks' profits and result in loan defaults by corporate clients. As Sewing strives to meet his ambitious profit and cost targets, some analysts remain sceptical about the bank's ability to meet all its goals. In January, Deutsche abandoned a key cost target.

Parker: Calgary-based Sewing Seeds launches life-changing program in Uganda
Parker: Calgary-based Sewing Seeds launches life-changing program in Uganda

Calgary Herald

time28-04-2025

  • General
  • Calgary Herald

Parker: Calgary-based Sewing Seeds launches life-changing program in Uganda

Article content Rick Castiglione has produced hundreds of promotional videos and documentaries to help organizations and individuals who work to help improve the lives of others. Telling 'stories that matter' has taken him to more than 70 countries, and he recently returned to Uganda with one of his favourite charities. Article content Castiglione first met Sylvia Rempel — founder of Calgary-based Sewing Seeds — in western Ukraine, and since then has been on every one of its overseas missions to the seven countries it serves. Rempel was the founder of Sun Ice, which designed and manufactured clothing worn by Canada's first Everest expedition. Its success helped it win the contract as a supplier to the 1988 Winter Olympics. Article content Article content Her new journey began when 100 Huntley Street called to report a donation of 30 sewing machines — and asked if she would travel to Sierra Leone to teach women how to use them. Article content Her amazing experience in the troubled East African country, seeing how newly taught sewing skills could make such a difference to the lives of women, resulted in her founding Sewing Seeds. The organization provides a set of skills that could lead to financial security, healthy families and stronger communities, resulting in many women benefiting greatly from her passion to develop a sewing skills training program. It has transformed lives in areas she has visited, and has established sewing centres in Sierra Leone, Ukraine, Haiti, Peru, Mexico and Guatemala. Article content Article content Uganda is a new country for Sewing Seeds to support. Article content Castiglione has spent a lot of time in Africa, producing videos and escorting his safari tours. A considerable amount of his time has been in Uganda, where he met a woman in Nkuringo — a small, remote community in that country's south where he has spent a considerable amount of time — who shared that she had a heart to teach local women how to sew. Article content Recognizing how she could benefit from a Sewing Seeds program — which always needs a partner on the ground in any country — with the help of a not-for-profit organization in Uganda and his Rotary Club of Calgary Downtown, the newest Sewing Seeds Program has launched.

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