German shares opened lower on Monday (January 20), tracking losses on Wall Street and in Asia, with banking shares coming under scrutiny after Deutsche Bank posted a surprise pre-tax loss of €1.15 billion (£950 million).
"The beginning of the week was weak, simply because the Deutsche Bank had to announce bad figures of the last quarter. And on the other hand, we've seen some figures out of China. The economy in China was not as strong as expected, 7.7 growth in China, and that gave us some concerns about the environment of the stock exchange," said Close Brothers Seydler Bank Ag trader, Oliver Roth.
Deutsche Bank posted a surprise pre-tax loss of €1.15 billion for the fourth quarter due to heavy costs for litigation and restructuring, and warned that 2014 would be another year of further challenges and reform.
The unexpected loss is likely to compound the problems that have dogged the bank over the past year, especially a lengthening list of lawsuits and regulatory matters.
"They have a lot, a bunch of problems. First of all, the scandals going on, like Libor, for example or the currency scandal right now. And they have much more concerns about the suits, the filed suits in the USA concerning the financial crisis and the results of it. So therefore we have seen in the last quarter huge problems for the Deutsche Bank and they will continue with these problems because these problems are not to be solved within four weeks," Roth said.
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