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10/10/2016, 12:19 PM (Source: TeleTrader)
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Deutsche Bank given stress test concessions

Deutsche Bank AG received special treatment approved by the European Central Bank (ECB) during stress tests this summer, the Financial Times reported on Monday. The tests, aimed to restore confidence in European lenders, were invoked by the troubled bank to reassure investors of its healthy financial position after its stock fell to record lows over the past few weeks.

The concession given to the biggest German lender artificially boosted its results and did not apply to any other institution undergoing the test, sources revealed. Namely, the bank recorded $4 billion in proceeds from selling its stake in Chinese bank Hua Xia although the transaction had not taken place before the end of 2015, a cut-off date for such deals to be reported. While Deutsche was allowed to include the impact of this deal on its performance in a footnote, no other bank was, even though many agreed similar transactions in the course of the year, the report said. It added that Deutsche's common equity tier one capital ratio would have been 7.4% instead of the present 7.8% if the sale had not been included.

The ECB claimed it treats all banks equally and did not provide any comment on Deutsche Bank's situation.

Breaking the News / IB