The slide continues.
Deutsche Bank AG (DB) - Get Report is set to be a smaller company, Bank of America Corp. (BAC) - Get Report analysts said in a note out to clients Monday that downgraded the stock from 'neutral' to 'underperform.'
Bank of America expects Deutsche Bank to see weakness in earnings per share, as a number of headwinds will weigh on German bank's earnings.
"Smaller balance sheet, smaller profits," the note said. " Sustainable growth is out of reach," it added. As Deutsche Bank has faced glaring liabilities of late, Bank of America thinks its small balance sheet will limit its ability to make loans in volume, and therefore, big profits are hardly attainable.
Also, "deleveraging will have an impact on revenues," the note said. Deutsche Bank has a leverage ratio target of 4.5%, but Bank of America doesn't see that being achieved with out cuts to the balance sheet.
Relatively heavy outlflows in the bank's asset management business are not helping either, as Bank of America has pointed out in previous notes.
The bank is coming off of a an earnings report that showed a 14% drop in earnings, year-over-year, with net income of 401 million Euro's for the quarter.
Shares are trading down just under 3% Monday.