Wednesday, September 7, 2011

Europe crisis could kill weak banks, says Deutsche Bank chief executive Josef Ackermann

Europe's sovereign debt crisis will stunt bank profit for years and could kill off the weakest, Deutsche Bank chief executive Josef Ackermann told industry bosses, amid intense scrutiny of the sector's finances.

"Prospects for the financial sector overall ... are rather limited," the CEO of Germany's top bank said on Monday. "The outlook for the future growth of revenues is limited by both the current situation and structurally."

Ackermann was speaking at Frankfurt's annual Banks in Transition conference against a backdrop of gloom in the capital markets, where fears some euro zone countries could default on their debts have sent investors scurrying for shelter.

Shares in the banks that hold much of that debt dropped, with the STOXX Europe 600 banking index falling nearly 5% to its lowest in 29 months.

Fears about how the crisis will play out have halted the takeovers and stock market listings that are the lifeblood of the bloc's investment banks as slowing global economic growth puts the prospect of recovery further into the future. more