Deutsche Bank faring well--or not

November 4, 2009 | By Jim Kim

When people talk about banks that have fared well in the crisis, JPMorgan Chase (JPM) and Goldman Sachs (GS) get mentioned early. For a while Deutsche Bank (DB) was mentioned as well, almost in the same breath. It certainly fared better than most, but people have stopped comparing it to the likes of Lehman Brothers and more to the investment bank survivors.

Breakingviews suggests that it has some work to do. It has grown trading revenue and held the line on fixed income, in line with peers. And it has inked two deals to "diversify earnings." But loan losses have emerged as a vexing issue. Some think the bank should have taken the recent opportunity to raise capital. It may not be able to hold for much longer. If so it will have little trouble. But why wait until regulators ask for such a move? We should assume that the environment will get worse before it gets better.

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