Highest loss so far 201
Since the beginning of January they have increased by a good eight percent to 7.52 euros. During the same period, the European banking index lost two percent. Stockbrokers warn against too much euphoria. «The shares had a tailwind thanks to encouraging statements from Sewing and the figures from US banks,» says chief analyst Stefan de Schutter from the brokerage firm Alpha Trading. «After the balance sheet presented by Deutsche Bank, it will be decided whether things will go downhill again.»
Sources used: Reuters news agency
Since the beginning of the year, the euro has risen by more than 15 percent against the US dollar – to currently over 1.2092 US dollars. This is the highest level since 2015. At the beginning of the year, many stock exchange traders had a euro / dollar rate of 1: 1 on their radar. What is behind the increase and how does it benefit the consumer? The most important questions and answers at a glance.
How much is the euro?
The euro is rising and rising: one day after the monetary policy decisions of the European Central Bank (ECB), it climbed to its highest level since January 2015. On September 8, 2017, the rate of the European common currency rose to 1.2092 US dollars. Most recently, a euro cost a little less at $ 1.2050. ECB President Mario Draghi was critical of the strength of the euro. At the same time, however, it provided signals for an early exit plan to the securities purchase program for a boost in the euro.
Why is the euro rising?
After the council meeting of the European Central Bank (ECB) at the end of August 2017, central bank chief Mario Draghi announced that he would advise on the bond purchases in autumn. In the markets, this was understood as a signal to let the program, which had previously been set up to a volume of 2.28 trillion euros, expire.
What’s so bad about a high euro rate?
For exporters, the competitive chances are worsened because their goods become more expensive on the world market. However, corporations usually protect themselves against such developments. Only when the trend turns sustained or turns drastically are companies really under pressure – for example with the pound sterling after the Brexit vote.
Wasn’t the euro slipping recently?
Yes. Because up to the presidential elections in France in spring, many investors feared a victory for the euro opponents. But then Emmanuel Macron – an outspoken supporter of the common currency – moved into the Elysee Palace and not the EU opponent Marine Le Pen. According to foreign exchange dealers, this increased euro purchases.
What role does Donald Trump’s politics play?
The election of Donald Trump as US president initially sparked speculation about rising inflation rates in the US, as he had promised a huge economic stimulus package and radical tax cuts. This had pushed the euro to a 14-year low below $ 1.04. But so far nothing has come of it, as the Republican is under strong pressure domestically due to the Russia affair among other things.
How does the euro affect the price of oil?
The strengthening of the euro against the US dollar is in principle a good thing for European consumers. The strong euro ensures that the oil price will remain low for the time being, because oil is billed in US dollars. The domestic prices for heating oil, diesel and gasoline are therefore likely to remain at the previous level.
What does a strong euro bring to the consumer?
A rising or falling euro affects the exchange rate, for example if you go on vacation in countries without euro currency. Thanks to the strong euro, travelers to the USA can now get more for their money again. But purchasing power is decisive, because: One euro can be worth more than just one euro. Because purchasing power abroad is often lower than in Germany, you get correspondingly more for your German money when you go on vacation – for example during the autumn vacation.political science essay topics
What is the purchasing power of the euro abroad?
There is currently a purchasing power advantage in Poland (1.87 euros), Turkey (1.83 euros) and Italy (1.01 euros). In Great Britain the purchasing power of the euro is 0.87 euros, in Canada it is 0.91 euros and in France 0.96 euros. It looks worse in Scandinavia: Denmark and Norway with 0.74 euros do not exactly make you want an inexpensive vacation.
Economy: Euro rises above 1.20 dollars for the first time since the beginning of 2015 Saving during the holidays: Poland cheap, Switzerland expensive – What the Euro is worth where European Union: Euro zone: The money supply is growing much weaker than expected
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The ex-boss of the state-owned construction company BLB, Ferdinand Tiggemann, who has been convicted of corruption, does not get his legal fees reimbursed by the state of North Rhine-Westphalia. The Düsseldorf regional court decided on Tuesday (Az .: 7 O 97/16). It was about 33,000 euros.
Since he was finally convicted, he was not entitled to such a claim, the court found. The country can expect its employees to not commit any criminal offenses. Tiggemann could also not argue that his behavior was officially necessary.
It would have looked different if the investigation had stopped or Tiggemann had been acquitted. He was sentenced to seven and a half years in prison for bribery. Because he had betrayed construction projects in the country several times, the taxpayer had suffered millions in damages. He had collected at least 178,000 euros in bribes for this.
Is that the trend reversal? Germany’s largest bank is making money again. But why the upswing is only the first step.
Deutsche Bank is back in the black after three consecutive years of losses. At 341 million euros, the 2018 surplus was, however, meager – both in comparison to the record numbers of the US competition and measured against the history of the largest German financial institution. The profit attributable to the shareholders of the institute amounted to 267 million euros.
Lower costs further
«The return to the profit zone shows that Deutsche Bank is on the right track,» says Deutsche Bank boss Christian Sewing – even if the bank is «far from being» where it wants to be. «Now it is a matter of taking the next step: We will continue to reduce costs in 2019 and, at the same time, make targeted investments in growth. In this way we will substantially increase our profitability beyond the current year.»
Sewing does not initially name a specific profit forecast for 2019. However, he states the goal of reducing the bank’s costs, adjusted for corporate restructuring and legal cases, to 21.8 billion euros, a little more than previously planned. In 2018, the cost was 22.8 billion euros.
Highest loss so far in 2015
In the 2015 financial year, Deutsche Bank had posted the highest loss in the company’s history at around EUR 6.8 billion; in 2016 the loss totaled almost EUR 1.4 billion, and in 2017 there was a loss of EUR 735 million.
In the final quarter of 2018, however, the Dax group slipped back into the red after three solid quarters. For October to December there were 409 million euros in losses on the books. Although that was significantly less than the minus of 2.4 billion euros a year earlier, it still meant a setback.
Money laundering raid
Deutsche Bank explained this with the generally challenging market environment, but also with «negative news» about the money laundering raid at the end of November: At that time, a large number of investigators searched the Deutsche Bank headquarters in Frankfurt. The allegation: Employees of the institute are said to have helped customers to set up mailbox companies in tax havens and thus launder funds from criminal offenses.
In connection with the money laundering scandal at Danske Bank, Deutsche Bank is mentioned again and again – wrongly, as the Frankfurters emphasize. Sewing affirmed in a letter to the employees: «Of course we will follow up on all indications. But the fact is: We currently have no indications of any misconduct on our part.»
The bank sees itself on the right track in coming to terms with its inglorious past. In the meantime, 19 of the 20 legal cases that harbored the greatest financial risk at the beginning of 2016 have been completely or partially resolved, the institute said. «No new matters have been added that are similar in size or financial risk to these cases.» The provisions for legal disputes were 1.2 billion euros at the end of the year, 40 percent lower than at the end of 2017 with 2.0 billion euros.
Further job cuts by the end of 2019
Sewing is pushing the pace with the corporate restructuring, which his predecessor John Cryan had already started. The downsizing is progressing a little faster than initially targeted. At the end of 2018, the Dax Group had a full-time workforce of over 91,700, a year earlier it was just over 97,500. By the end of 2019, the board wants to reduce the number of full-time positions to «well below 90,000».
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For the shareholders, the first annual profit since 2014 should at least pay off somewhat: The management board wants to distribute a dividend of 11 cents per share, as it did a year earlier. However, the price of the share has been under pressure for months, at the end of December 2018 the all-time low was reached at EUR 6.68. This is another reason why there is persistent speculation that Deutsche Bank and Commerzbank could be pushed to merge by politicians. With a good 15 percent, the federal government is the largest single shareholder in Commerzbank.
After the rejection of a merger with Commerzbank, Deutsche Bank wants to focus on day-to-day business again. The interim results for the first three months of 2019 are at least better than expected by many analysts.
One day after the merger talks with Commerzbank were broken off, Deutsche Bank reported a significant profit increase for the first quarter of the year. Consolidated profit after taxes rose by 67 percent to 201 million euros compared to the same period in the previous year, according to Deutsche Bank in Frankfurt am Main. The result shows «the strength of our customer business», explains CEO Christian Sewing.
On the other hand, there was a decline in sales: they fell by nine percent to 6.4 billion euros compared to the same quarter of the previous year. «Our discipline with costs helped us to compensate for lower returns,» explains Sewing.
He sees the financial institution on track when it comes to reducing costs. Deutsche Bank is on the «very good path to achieve our cost target of 21.8 billion euros for 2019».
Sewing took over the chief position at Deutsche Bank from the British John Cryan last April. Shortly thereafter, he announced that he would gear the business model more closely to private and corporate customer business in Europe and want to shrink the volatile investment banking. In the course of this, job cuts were also announced.
Contaminated sites prevented merger
On Thursday the Deutsche Bank had already put the quarterly profit at around 200 million euros and at the same time announced together with Commerzbank that there will be no merger between the two major banks. After a thorough examination, the respective board members came to the conclusion that a merger «would not offer sufficient added value».
Both Deutsche Bank and Deutsche Bank still have major construction sites, for example in IT or with legacy legal issues, it is said after the merger was canceled. The ongoing low interest rates and rising regulatory costs are an additional burden on the banks.
Supervisors urged the two financial institutions to continue their conversion course. «We are assuming that both banks will systematically pursue the restructuring efforts they have already started, which are showing positive results,» said Joachim Wuermeling, the Bundesbank board member responsible for banking and financial supervision.
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Economics professor Isabel Schnabel from the University of Bonn does not expect Deutsche Bank to become the takeover target of a foreign bank. «I don’t think any other bank is daring to approach Deutsche Bank at the moment,» she told the Handelsblatt. «Nobody knows what risks from the past lie dormant.»
Sources used: news agencies afp, dpa
According to media reports, the Berlin SPD wants to significantly increase the salaries of public sector employees in the capital. The «Bild» newspaper and the «B.Z.» reported that by the end of the legislative period in autumn 2021, the wages should be adjusted to the level of colleagues in the federal government. on Saturday. This is how you want to score points in the fight for more and good staff, it said.
That would be a huge leap up, however, since federal employees are currently 12 percent ahead. According to the Berlin tax authorities, only one percent more for the more than 104,000 public sector employees would cost around 45 million euros a year.
A spokeswoman for the Berlin SPD confirmed that the plan is primarily from the SPD parliamentary group. The party supported the project. The capital city comrades also want to raise the minimum wage significantly. By the end of 2021 it should rise to 12.63 euros.
The former head of the state-owned construction company BLB, Ferdinand Tiggemann, who has been convicted of bribery, is demanding almost 33,000 euros from the state of North Rhine-Westphalia. The country has to bear the costs that he has incurred as a result of the investigation because he is entitled to legal protection, he argues. The Düsseldorf regional court wants to decide on the civil action on Tuesday.
Tiggemann has been sentenced to seven and a half years in prison for corruption. Because he had betrayed construction projects in the country several times, the taxpayer had suffered millions in damages. He had collected at least 178,000 euros in bribes for this.
Does German law or that of the adopted country apply in the event of death? If you want to leave something behind, you can remove various uncertainties for your heirs during your lifetime.
Inheritance within the EU
An EU inheritance law regulation has been applicable since August 2015, which, at least in Europe, introduces uniform rules for cross-border inheritance cases.