Plus   Neg

Deutsche Bank Lost $1.6 Bln On A Bond Bet: WSJ

German banking giant Deutsche Bank AG (DB) has lost $1.6 billion over nearly a decade on a complex municipal-bond investment that it bought before the 2008 financial crisis, the Wall Street Journal reported.

The bank failed to confront head-on even as markets were upended and regulations tightened, the report said.

In 2007, Deutsche Bank bought about $7.8 billion portfolio of 500 municipal bonds, which were insured by specialized monoline insurers to protect the bank against defaults by the issuers. In March of 2008, the bank bought additional default protection from Berkshire Hathaway for $140 million.

Deutsche Bank offloaded the bonds in 2016, incurring $1.6 billion in losses. The transaction was unwound in 2016 as part of the closure of its Non-Core Operations unit.

The loss reportedly represents one of Deutsche Bank's largest ever from a single wager, roughly quadruple its entire 2018 profit.

For comments and feedback contact: editorial@rttnews.com

Business News

Editors Pick
Alibaba is upgrading its intellectual property system using blockchain technology, according to local news outlet Sohu. Alibaba Platform Management expects this to benefit mainly small and medium-sized enterprises, brands and entrepreneurs. The technology will be fully implemented in September, and thereafter, the company intends to expand it to the field of digital copyright protection. Electronics retailer Best Buy Co., Inc. (BBY) reported Thursday a 27 percent increase in profit for the first quarter from last year, which was impacted by restructuring charges, and higher revenues. Both adjusted earnings per share and revenues for the quarter topped analysts' estimates. The company also provides guidance for the second quarter and reiterated its outlook for the full-year 2020. While reporting financial results for the second quarter on Thursday, Hormel Foods Corp. (HRL) lowered its earnings and net sales guidance for the full-year 2019. For fiscal 2019, the company now projects earnings in a range of $1.71 to $1.85 per share, and net sales between $9.70 billion and $10.20...
Follow RTT