Deutsche share woe: Boss writes to staff to insist bank is strong

The head of Deutsche insisted the bank was in rude financial health as he sought to draw a line under a week of turmoil.

John Cryan wrote to the bank's 100,000-strong workforce as the bank's shares hit new lows following renewed fears about its funding.

Shares (Berlin: DI6.BE - news) in the lender opened 8% lower on Friday, helping to drag wider markets into the red, but later fought back above their opening mark.

Mr Cryan said in a letter to staff that latest concerns surrounding the firm were unjustified and told them: "We are and remain a strong Deutsche Bank (LSE: 0H7D.L - news) ."

He said "ongoing rumours" were to blame for causing turbulence in Deutsche's stock price.

But he insisted that "at no point in the last two decades has the balance sheet of Deutsche Bank been as stable as it is today".

Worries about the lender spread to other banking stocks during the session, helping the FTSE 100 open 100 points lower.

But the London index also fought back to recover much of its early losses, as did markets in France and Germany.

The turbulent day for Deutsche followed a big sell-off on Wall Street on Thursday, when its New York listed shares lost 7%.

That was sparked by a report that hedge fund clients had withdrawn excess cash and adjusted positions linked to the bank.

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Mr Cryan wrote to staff that the report on hedge funds had led to "unjustified concerns".

He said they should "look at the complete picture" of the bank, with its more than 20 million customers, and "extremely comfortable" cash buffer of €215bn (£185bn).

Earlier this week, the lender had sunk to a record low on fears over its funding, and the German government had been forced to deny it was preparing a rescue plan.

But in the last couple of days the shares had stabilised.

Fears over Deutsche deepened after it emerged that it was facing a US fine of up to $14bn (£11bn) over its conduct during the financial crisis.

Germany's banks are, more widely, seeing profits squeezed by the European Central Bank's negative interest rate and money printing policies, which narrow the margins they can make from loans.

Deutsche is in the midst of a major shake-up including thousands of job cuts as it seeks to turn around its fortunes.

The size of the global banking giant, and its troubled state, have seen it labelled as the single biggest net contributor of risk to the global financial system by the International Monetary Fund.