Fitch Ratings on Dec. 13 maintained Deutsche Bank AG's ratings, including its A-/F1 long- and short-term issuer default ratings, "a-" viability rating, A(dcr) derivative counterparty rating and A/F1 deposit ratings on Rating Watch Negative.
The action, taken as part of the agency's periodic review of 12 large and globally active banking groups, was triggered by the agency's belief that Deutsche Bank's ability to build revenue and capital during 2017, in line with its 2020 targets, will be impeded by the sluggish business environment, particularly in Europe and also in Asia-Pacific.
Fitch added that the prolonged negative publicity surrounding the bank's litigation risks could also make it more difficult for the lender to adapt its business models and improve efficiency, or to make progress in resolving the legal action. The bank is still in talks to contest a $14 billion penalty sought by the U.S. Department of Justice over misselling of MBS in the U.S.
Deutsche Bank's business model, which is more focused on capital markets businesses than those of its peers in Fitch's global trading and universal banks category, is making the lender more sensitive to the business environment, the agency added.
Fitch also maintained the A-/F1 long- and short-term issuer default ratings of Deutsche Bank Securities Inc., Deutsche Bank Trust Co. Americas and Deutsche Bank Trust Corp. on Rating Watch Negative, along with Deutsche Bank Financial LLC's F1 short-term issuer default rating.
The agency said it expects to resolve the Rating Watch Negative placement no later than after the publication of the bank's first-quarter 2017 earnings.