Deutsche Bank (DB) Plummets Amid Concern Over DOJ Settlement - TheStreet

NEW YORK (TheStreet) --  Shares of Deutsche Bank (DB) - Get Report slid 5.92% to $12 on Monday morning, amid concerns that an anticipated settlement with the U.S. Department of Justice over its trades in mortgage-backed securities during the 2000s housing bubble - potentially $14 billion -- will damage the German bank's capital position.

A German magazine reported over the weekend that German Chancellor Angela Merkel would not extend any state aid to Deutsche Bank.

Will this be German's Lehman Brothers moment? Not necessarily, Lindsey Group Analyst Peter Boockvar argued Monday on CNBC's "Squawk on the Street."

"We have to assume that the German government in some way will bail them out," he said, in direct contrast to the report coming out of the country. "I think it gets to a larger picture of the destruction of the profitability and economics of banking in this modern day regulatory and central bank world we're in."

A prevailing culture of negative interest rates has stymied financial activity for many banks in Europe, according to Boockvar.

"What's Merkel going to do about it? Shove more cash into a capitalized bank?," he asked. "Unless central bank policy changes, the economics of the banking business won't change either."

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

We rate DEUTSCHE BANK AG as a Sell with a ratings score of D. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

You can view the full analysis from the report here: DB

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