LONDON - There’s bad days at most companies, and then there’s a typical 24 hours at Deutsche Bank. Even by the German lender’s low standards, November 29 will stick out as a dies horribilis: a police raid on its Frankfurt HQ followed by an achingly defensive press release, media speculation that the head of its investment bank is under pressure to go, and further dips in its share price. Even so, there are still reasons to believe Deutsche can bounce back.

True, the raid – complete with a fleet of black vans parked outside – is a PR disaster. Yet to date at least, the Panama Papers revelations over suspected tax evasion have not led to much discernible impact on European banks. It could be more a way for the German authorities to show they are doing something, given Deutsche is at risk of being drawn into the Danske Bank affair.

There’s a similar shrug-worthy quality to the news, reported by the Financial Times on Nov. 29, about the future of Garth Ritchie, the head of the investment bank. Even if he were to leave, Deutsche has a number of structural trends that should benefit its bedrock fixed income division, which accounts for nearly a fifth of group revenue. Ongoing currency volatility, predicted to last well into next year, should help widen spreads and mean more profits. Rising European rates should help reverse recent revenue declines.

Meanwhile, Deutsche has only just begun to extract a targeted 900 million euros in synergies from its merger with Postbank in Germany, a combo which was completed in May. To that end, boss Christian Sewing need not unduly worry about one bad day in the office. His future will be governed by Deutsche’s success, or otherwise, over the next 12 months.

On Twitter https://twitter.com/CGAThompson

 

CONTEXT NEWS

- Police raided six Deutsche Bank offices in and around Frankfurt on Thursday over money-laundering allegations linked to the “Panama Papers”, according to a Reuters report on Nov. 29 citing the local public prosecutor’s office.

- Investigators are looking into the activities of two unnamed Deutsche Bank employees alleged to have helped clients set up offshore firms to launder money, the prosecutor’s office said.

- Around 170 police officers, prosecutors and tax inspectors searched the offices where written and electronic business documents were seized.

- “Of course, we will cooperate closely with the public prosecutor’s office in Frankfurt, as it is in our interest as well to clarify the facts,” Deutsche Bank said, adding it believed it had already provided all the relevant information related to the Panama Papers.

- Separately, the Financial Times reported on Nov. 29 that Garth Ritchie, the head of Deutsche’s corporate and investment bank, faced “rising doubts over his future”, citing two people close to the bank’s supervisory board.

- In September the supervisory board, headed by chairman Paul Achleitner, extended Ritchie’s contract for five years.

- The FT reported that “one person close to the supervisory board said this could not be stopped as the chairman was putting his full weight behind the decision, adding that Mr Ritchie’s position needed to be reviewed after the bank’s ‘dismal’ investment banking performance.”

- Deutsche Bank shares were down 2.5 percent to 8.38 euros at 1502 GMT on Nov. 29.

- For previous columns by the author, Reuters customers can click on THOMPSON/

- SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS http://bit.ly/BVsubscribe

 

(Editing by George Hay and Bob Cervi) ((Christopher.G.Thompson@thomsonreuters.com; Reuters Messaging: Christopher.G.Thompson.thomsonreuters.com@reuters.net))