Deutsche Bank + Commerzbank = Ogre Zombie Bank

This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.

What do you get when you merge German zombie Deutsche Bank and zombie Commerzbank? An ogre zombie bank!

Liquidity moves markets!

Follow the money. Find the profits! 

Or as Billy Preston almost sang, “Nothing Plus Nothing Equals Nothing.”

Both Deutsche Bank and Commerzbank are trading at under $10 or 10 Euros per share. This is down from over $100 per share for Deutsche Bank in the 2000s and Commerzbank was trading at over 200 Euros as well. How the once mighty have fallen.

dbcomm

Earning per share for Deutsche Bank have plummeted despite efforts to revamp their business model.

dbeps

The same goes for Commerzbank.

gbkeps

While Commerzbank hasn’t issued any contingent collateral (CoCo) bonds, Deutsche Bank has issued 4 CoCo bonds. Here is the 6% CoCo bond. The good news? Both CDS and the yield to maturity (YTM) have been declining in 2019, likely reflecting the expected merger of the two.

db6

The downside? Merging two large zombie banks creates an “Ogre Zombie” bank. One that the ECB and German government cannot permit to fail.

ogreZombie

Wall Street Examiner Disclosure:Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. I may receive promotional consideration on a contingent basis, when paid subscriptions result. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. No endorsement of third party content is either expressed or implied by posting the content. Do your own due diligence when considering the offerings of information providers.

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