The Federal Reserve has designated Deutsche Bank AG’s U.S. business in “troubled condition,” the Wall Street Journal reported here on Thursday, citing people familiar with the matter.
The downgrade to one of the lowest designations occurred about a year ago and has not been previously reported, the report said and has influenced Deutsche Bank’s moves to reduce risk-taking and required the lender to seek approval for U.S. hiring decisions, the Journal reported.
The Financial Times also reported Thursday, citing a source, that Deutsche Bank’s U.S. subsidiary was added to the Federal Deposit Insurance Corporation’s list of “problem banks,” or those with weaknesses that threaten their financial survival.
“As a matter of policy, we do not comment on specific regulatory feedback,” a Deutsche Bank spokesperson said in a statement. “The ultimate parent of the Deutsche Bank Group, Deutsche Bank AG, is very well capitalized and has significant liquidity reserves.”
The spokesperson also said its principal U.S. banking subsidiary “has a very robust balance sheet.”
A FDIC spokesperson said the agency does not comment on open and operating institutions. The Federal Reserve did not immediately respond to a CNBC request for comment.
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In Frankfurt trading, the group’s shares were down 2.5 per cent at €9.62. The lender has tumbled almost 40 per cent for the year to date as it faces a series of challenges.