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Deutsche Bank’s Banziger Says Crisis ‘Far From Over’ (Update1)
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By Aaron Kirchfeld

March 30 (Bloomberg) -- Deutsche Bank AG Chief Risk Officer Hugo Banziger said the global credit crisis is “far from over” and global financial regulations must be overhauled to regain investor trust.

“We are in the middle of it,” Banziger, 53, said today at an event at the Frankfurt School of Finance and Management. The industry has “an opportunity” to build a stable financial system that seeks higher capital buffers, and encourage investors to return money to the market and help stem the crisis, he said.

Deutsche Bank in February reported its first annual deficit in more than 50 years after the worst financial crisis since the Great Depression pummeled bond and stock trading. The crisis has caused $1.3 trillion in losses for financial companies worldwide, a total that may climb to more than $3 trillion, Banziger said today, citing forecasts.

Deutsche Bank has gained 40 percent this month in Frankfurt trading, valuing the bank at 18 billion euros ($24 billion), and eclipsing the 5 percent advance in the Bloomberg Europe Banks and Financial Services Index of 65 companies. The bank fell 10 percent to 28.75 euros in trading today.

The German bank skirted the worst of the U.S. subprime mortgage collapse by betting against the bonds that contributed to credit losses and writedowns at the world’s largest financial companies and forced government-led bailouts from Berlin to London to Washington.

UBS, Citigroup Markdowns

The German bank has booked about 9.3 billion euros in writedowns since the start of the U.S. subprime mortgage crisis in 2007. UBS AG in Zurich has had $50.6 billion of costs and New York-based Citigroup $88.3 billion, according to data compiled by Bloomberg.

Deutsche Bank is resisting pressure to take government aid or raise additional capital to protect existing shareholders that have seen the value of their stock decline, Banziger said today.

“One of my top priorities is to make sure that those who lost money recover it,” Banziger said. Protecting shareholder value is “our deep philosophy” and Deutsche Bank’s management “will stand by this.”

Deutsche Bank has several times raised its goal for its Tier 1 capital ratio, a key measure of solvency, Banziger said. The bank’s ratio is 10 percent, which may be insufficient in the future and result in raising the standard rising to 12 percent, he said.

To contact the reporter on this story: Aaron Kirchfeld in Frankfurt at [e-mail]

Last Updated: March 30, 2009 15:29 EDT