B10| Thursday, October 31, 2019 THE WALL STREET JOURNAL.**
Toyota Motor Credit Corp. recently sold $1.5 billion of debt linked to the secured overnight financing rate, aimed at replacing Libor.LUKE SHARRETT/BLOOMBERG NEWS
tinuing them well into next
year. Fed officials also said
they would buy $60 billion a
month in Treasury bills.
While policy makers’ ac-
tions have lowered repo rates
and damped volatility, banks
have been borrowing in larger
amounts from the Fed. The
need for such strong measures
to calm a market that would
help set borrowing costs on
trillions of dollars of mort-
gages, corporate loans and fi-
nancial derivatives has unset-
tled many.
The Fed is watching devel-
opments in short-term cash
markets closely, Chairman Je-and impervious to manipula-
tion because it is based on ac-
tual rates in short-term cash
markets. Libor, by contrast, is
an “indicative rate” based on
the rates banks say they can
get.
The challenges posed by the
new structure became appar-
ent in recent weeks, when a
shortage of available cash
caused rates to spike in an ob-
scure but crucial part of the fi-
nancial system—the market
for Treasury repurchase agree-
ments, or repos. Repo rates
climbed as high as 10% from
around 2%, traders said, push-
ing SOFR to a record 5.25%,
about 3 percentage points
above its previous range.
“It was a shock to the sys-
tem,” said Jason Granet, who
heads Libor transition efforts
at Goldman Sachs Group Inc.
Companies will be more likely
to look past the volatility as
they become more informed
about how SOFR performs
over time, he said.
The disruption led the Fed
to inject cash into money mar-
kets for the first time since
the financial crisis. Officials
began by offering billions of
dollars of overnight loans in
the repo market. Then they
added two-week loans and in-
creased the amount of both of-
ferings, committing to con-rome Powell said in response
to the recent turmoil at a
news conference Wednesday.
By lowering repo rates, the
Fed’s interventions have
cooled some investors’ de-
mand for SOFR-linked debt.
Banks, investors and regula-
tors have struggled with the
challenge of finding a Libor re-
placement. All parties want a
benchmark that reflects the
risks from short-term lending
and is supported by a liquid
market that behaves in a pre-
dictable manner. Properly set-
ting the rates on business and
consumer loans can determine
whether such loans are afford-
able for borrowers and profit-
able for lenders.
Treasury Department offi-
cials said Wednesday the gov-
ernment is considering intro-
ducing new floating-rate
securities with rates linked to
SOFR. Bond analysts said they
expect the government to start
selling them next year.
Advocates of the new rate
point to a $1.5 billion sale of
SOFR-linked debt by Toyota
Motor Credit Corp. earlier this
month as a sign that repo vol-
atility isn’t a fatal flaw.
“We view the recent volatil-
ity in the repo market as a
manageable risk,” said Adam
Stam, Toyota’s national man-
ager of secured funding.Turmoil in short-term
money markets has rattled a
protracted effort to phase in a
new borrowing benchmark
meant to eventually underpin
trillions of dollars in lending
contracts.
Issuance of floating-rate
debt linked to the secured
overnight financing rate, or
SOFR, has slipped to $24.5 bil-
lion this month as of Oct. 28,
according to TD Securities
USA. That is down from $43.4
billion in September and $56.1
billion in August. The pullback
comes after September’s tur-
moil in short-term cash mar-
kets prompted the Federal Re-
serve to intervene, renewing
questions about whether SOFR
will be ready to replace its
predecessor by 2021.
The decline highlights the
difficulties faced by banks,
policy makers and companies
as they try to replace the Lon-
don interbank offered rate.
That rate, known as Libor, un-
derpins trillions of dollars in
financial contracts world-wide
but was slated for replacement
after a manipulation scandal.
Created by a Fed committee
of regulators, banks and asset
managers, SOFR was designed
to be more reliable than LiborBYDANIELKRUGER
ANDVIPALMONGANew Rate Benchmark Hits Rough Patch
IssuanceofSOFR-linkeddebtSource: TD Securities USANote: October 2019 data is as of Oct. 28.$6001020304050billion2019Highs
AGNC InvtPfdE AGNCO 25.65 0.8
AT&T T 38.87 0.4
AgreeRealty ADC 79.11 0.6
AlamoGroup ALG 129.93 1.5
Allegion ALLE 117.15 0.9
Allergan AGN 176.00 0.7
Allstate PfdA ALLpA 26.68 0.6
Alphatec ATEC 6.48 3.7
AmericanAssets AAT 48.70 3.0
AmericanFin AFIN 14.90 1.6
AmerSoftware AMSWA 16.38 3.7
AmericoldRealty COLD 40.23 1.1
AmkorTech AMKR 15.25 -8.8
AnixterIntl AXE 84.10 16.8
AnnalyCapPfdG NLYpG 25.82 1.2
ApexTechAcqn APXTU 10.30 0.1
Aptiv APTV 92.76 2.3
ArchCapitalPfdF ACGLO 26.67 0.1
ArmadaHoffler AHH 18.77 1.8
ArrowFinancial AROW 35.36 0.3
ArrowheadPharm ARWR 40.35 0.3
AstraZeneca AZN 49.05 3.0
AtheneHldgPfdB ATHpB 26.74 1.0
B.RileyPrMerg BRPM.U 10.15 0.2
BankofAmPfdGG BACpB 27.78 -0.2
BankofAmPfdL BMLpL 23.59 ...
BankofAmPfdL BACpL 1514.48 1.2
BankofHawaii BOH 88.75 -0.252-Wk %
Stock Sym Hi/Lo Chg
BellRingBrands BRBR 17.84 0.9
BenchmarkElec BHE 34.48 1.4
BioanalyticalSys BASI 5.00 10.9
BioDeliverySci BDSI 6.12 ...
Brady BRC 58.83 0.3
BrixmorProp BRX 22.40 4.6
BrookfieldMgt BAM 55.67 1.4
BrookfieldInfr BIP 50.61 0.1
BrookfieldPropPfd BPYPP 27.22 1.0
Brown&Brown BRO 37.78 1.0
CBIZ CBZ 28.13 8.5
CDW CDW 127.51 1.0
CabalettaBio CABA 10.79 1.3
Cabco GS GYB GYB 22.50 ...
CaledoniaMining CMCL 8.07 1.8
CarriageSvcs CSV 26.81 -1.5
Cintas CTAS 276.49 0.6
CleanHarbors CLH 85.55 7.1
Cohen&Steers CNS 66.19 2.8
CommunityHlthcr CHCT 47.94 1.5
CompassPfd CODIpB 25.30 -0.4
CompassDiversif CODI 20.47 0.6
Compugen CGEN 4.88 7.8
Crocs CROX 39.13 15.6
CrownHoldings CCK 74.26 0.9
Cubic CUB 74.97 3.3
DecipheraPharm DCPH 43.93 8.2
DigitalRealtyPfdL DLRpL 25.89 0.5
Diodes DIOD 47.43 1.5
DorianLPG LPG 12.78 3.6
DouglasDynamics PLOW 47.71 1.752-Wk %
Stock Sym Hi/Lo Chg
DouglasEmmett DEI 43.67 1.6
EMCOR EME 93.54 2.8
EasterlyGovtProp DEA 22.29 1.3
EastGroup EGP 134.69 0.6
Endava DAVA 44.99 0.3
EnstarPfdE ESGRO 27.17 -0.5
EnstarGroup ESGR 198.38 0.9
Entergy ETR 121.62 2.1
EssaPharma EPIX 4.82 1.6
Euronav EURN 11.79 5.2
ExlService EXLS 70.51 0.5
FidusNts2024 FDUSG 25.60 ...
FifthThirdPfdK FITBO 25.94 1.1
FinInstitutions FISI 31.93 2.5
FirstCitizBcshA FCNCA 503.73 -0.2
FirstCmwlthFin FCF 14.65 2.5
FirstIndRlty FR 42.24 1.2
ForumMergerII FMCI 10.16 0.4
Garmin GRMN 96.44 9.6
GasLogPtrsPfdA GLOPpA 25.90 ...
Genmab GMAB 21.76 0.5
GermanAmerBncp GABC 33.48 1.6
GibraltarInds ROCK 54.76 0.5
GigCapital2 GIX.U 10.47 0.1
GladstoneCap GLAD 9.93 0.4
GladstoneInvt GAIN 12.85 0.3
GSK GSK 45.84 2.4
GlobalPtrsPfdA GLPpA 27.87 -0.8
GolarLNG PfdA GMLPP 25.97 0.2
GrAeroportuario OMAB 56.47 -1.0
HealthcareRealty HR 34.74 1.352-Wk %
Stock Sym Hi/Lo ChgWednesday, October 30, 2019HealthcareAmer HTA 31.27 1.9
HighpowerIntl HPJ 4.81 ...
Hubbell HUBB 144.36 1.1
HudsonPacProp HPP 36.41 2.5
HuronConsulting HURN 68.40 10.1
IVERICbio ISEE 3.60 65.6
IndepRealty IRT 15.39 1.4
Inphi IPHI 72.31 19.4
InsightEnt NSIT 62.03 1.1
IntlMoneyExpress IMXI 15.64 1.9
InvescoMtgPfdC IVRpC 26.88 0.7
KBR KBR 29.71 12.1
KenonHoldings KEN 22.50 -1.9
Kforce KFRC 41.00 0.7
KilroyRealty KRC 84.38 2.1
KimcoRealty KIM 21.74 2.9
KimcoRealtyPfdM KIMpM 26.73 -0.2
KiteRealty KRG 17.88 1.9
Knoll KNL 27.49 -0.5
Koppers KOP 32.60 -0.3
LandmarkInfrPtrs LMRK 18.45 -0.7
Leggett&Platt LEG 52.14 0.6
LexingtonRealty LXP 10.88 0.6
MDU Rscs MDU 29.39 3.3
MSA Safety MSA 120.73 0.8
Marsh&McLen MMC 103.66 1.4
Masco MAS 46.47 3.5
McGrathRent MGRC 80.47 10.4
MicroStrategy MSTR 154.40 4.6
MidWestOneFin MOFG 32.93 0.6
MillerIndustries MLR 36.34 2.5
ModelN MODN 29.69 2.5
MurphyUSA MUSA 94.84 1.3
MutualFirstFin MFSF 39.71 20.2
NBT Bancorp NBTB 40.05 -0.2
NGL EnergyPfdB NGLpB 25.75 2.7
NICE NICE 159.30 1.9
NatlStoragePfdA NSApA 26.83 0.6
NorthwestPipe NWPX 29.88 0.7
NovoNordisk NVO 55.68 2.252-Wk %
Stock Sym Hi/Lo Chg
NuanceComms NUAN 16.48 0.2
NuSTAR PfdA NSpA 24.83 -0.5
NuSTAR PfdB NSpB 22.75 1.0
Oshkosh OSK 89.80 5.8
OtterTail OTTR 56.16 1.7
PCConnection CNXN 44.43 0.9
PDF Solutions PDFS 16.57 0.2
PPG Ind PPG 126.28 0.7
ParkerHannifin PH 194.16 0.5
PatternEnergy PEGI 28.37 2.0
Perficient PRFT 41.82 -4.4
PiedmontOfficeA PDM 21.56 1.7
PriceSmart PSMT 79.90 3.5
ProficientAlphaUn PAACU 10.24 -0.1
QCR Holdings QCRH 41.50 -1.1
QwestNts2054 CTV 25.87 0.6
QwestNts2057 CTDD 26.14 0.7
RPM RPM 73.29 0.2
RPTRealty RPT 14.49 2.4
RPTRealty7.25%PfdD RPTpD 57.74 1.5
Radcom RDCM 10.36 1.0
RealtyIncome O 81.97 1.3
ReataPharm RETA 207.25 0.9
RecroPharma REPH 14.30 0.5
ReinsGrp RGA 163.72 0.5
ResMed RMD 147.90 0.4
RetailPropofAmer RPAI 13.84 2.4
RexfordIndlRealty REXR 48.58 ...
Rexnord RXN 31.80 2.7
RitchieBros RBA 41.00 0.7
SITE Centers SITC 15.78 1.9
SJW Group SJW 74.47 1.8
SP Plus SP 40.44 -0.5
SPX SPXC 43.26 0.4
SPX FLOW FLOW 47.92 5.0
StoreCapital STOR 39.93 1.6
SabraHealthcare SBRA 24.15 0.1
Sanfilippo JBSS 105.92 3.0
Sanofi SNY 47.47 1.5
SapiensInt SPNS 21.54 2.052-Wk %
Stock Sym Hi/Lo Chg
SenecaFoods B SENEB 35.40 0.7
SherwinWilliams SHW 587.14 0.8
Sibanye-Stillwater SBGL 7.61 7.3
SiteOneLandscape SITE 89.89 9.2
Sony SNE 61.77 3.1
Southern SO 62.88 2.8
SpiritRealtyCap SRC 49.69 0.9
SteelPtrsPfdA SPLPpA 22.62 1.1
StevenMadden SHOO 41.49 0.6
StockYardsBncp SYBT 40.43 0.8
SummitMaterials SUM 24.42 2.9
TaiwanSemi TSM 52.06 0.9
TeekayOffshorePf TOOpA 22.04 1.5
TerrenoRealty TRNO 55.49 0.9
Toro TTC 77.50 -0.1
ToyotaMotor TM 139.09 0.2
Transcat TRNS 31.41 0.6
TrinityMergerUn TMCXU 12.18 1.5
TsakosEnergyPfdD TNPpD 24.52 0.1
UDR UDR 50.36 2.4
US Lime&Min USLM 86.05 3.0
UniversalHealth UHT 121.97 3.3
UrbanEdgeProp UE 21.32 0.6
Urstadt Pfd K UBPpK 25.90 0.9
UtahMedProducts UTMD 103.58 2.0
VICI Prop VICI 23.99 1.1
VSE VSEC 39.50 16.9
Vectrus VEC 47.45 -0.1
VertxPharm VRTX 199.46 0.7
Vipshop VIPS 12.00 2.6
WashingtonREIT WRE 31.34 3.9
WeingartenRealty WRI 31.78 6.4
WellCareHealth WCG 301.06 5.0
WestBancorp WTBA 23.96 -0.6
WestamericaBncp WABC 67.04 -0.1
Weyerhaeuser WY 30.06 1.2
Youdao DAO 15.02 9.1
ZealandPharma ZEAL 30.99 10.8
ZionsBancorpPfdH ZBpH 26.45 0.7
Zymeworks ZYME 33.45 1.852-Wk %
Stock Sym Hi/Lo ChgLows
AIM Immuno AIM 0.48 2.3
AMC Networks AMCX 43.57 -2.5
Ability ABIL 0.41 -6.4
AcaciaResearch ACTG 2.47 0.4
AcordaTherap ACOR 1.72 2.2
AdtalemGlbEduc ATGE 27.58 -18.7
AlkalineWater WTER 1.28 -2.2
AllianceResource ARLP 10.85 -6.1
AltisourcePortf ASPS 15.30 10.3
ApproachRscs AREX 0.10 -9.2
AridisPharm ARDS 5.28 -4.1
ArtWayMfg ARTW 1.77 -1.4
AtaraBiotherap ATRA 10.84 -4.1
AvalonGloboCare AVCO 1.50 -3.1
Aware AWRE 2.66 -2.2
BRP Group BRP 15.29 2.2
BancodeChile BCH 25.47 -2.0
BcoSantChile BSAC 24.58 -5.6
BaytexEnergy BTE 1.14 -5.0
BeasleyBroadcast BBGI 2.85 -0.3
BeyondSpring BYSI 11.50 -3.5
BioCryst BCRX 2.08 -8.5
BioPharmX BPMX 0.28 -2.2
Bsquare BSQR 1.06 -0.9
C&J Energy CJ 7.13 -10.6
CBS B CBS 35.05 -1.7
CHF Solutions CHFS 0.88 -4.6
CH Robinson CHRW 76.28 -14.8
CONSOL Energy CEIX 13.52 -3.4
CaliforniaRscs CRC 6.02 -17.2
CamberEnergy CEI 2.95 -17.7
ChampionsOncology CSBR 5.01 -2.4
CitizensFinPfdE CFGpE 24.90 ...
Coca-Cola Femsa KOF 54.79 -0.5
CerveceriasUnid CCU 19.78 -0.2
ContainerStore TCS 3.94 -21.4
CoolHldgs AWSM 0.23 -17.0
CraftBrewAlliance BREW 7.24 -1.552-Wk %
Stock Sym Hi/Lo Chg
CyclerionTherap CYCN 2.66 -79.5
CytomXTherap CTMX 5.86 1.2
DPW DPW 1.10 -6.9
DelTaco TACO 7.42 1.7
DiffusionPharm DFFN 0.57 -27.3
DocumentSecSys DSS 0.25 -15.7
EloxxPharm ELOX 2.87 6.0
EmbotellAndinaB AKO.B 16.95 -2.1
EnableMidstream ENBL 10.03 -0.3
Endologix ELGX 2.28 -21.2
Energous WATT 2.76 0.4
EstreAmbiental ESTR 0.18 -2.5
ExelaTech XELA 0.55 -20.1
ExtractionOil XOG 1.78 -6.7
Ferrellgas FGP 0.50 -4.7
GAMCO Investors GBL 14.81 -2.8
GSE Systems GVP 1.46 -2.7
GreenproCap GRNQ 0.65 -5.7
GrubHub GRUB 32.11 2.7
Hi-Crush HCR 1.26 -3.7
IMAC IMAC 2.42 -0.7
iBio IBIO 0.15 -5.9
Inpixon INPX 0.07 -4.3
InternetGold IGLD 12.16 -2.8
IsraelChemicals ICL 4.42 -1.5
ItauCorpBanca ITCB 9.10 -0.7
IterumTherap ITRM 2.64 -17.4
Jiayin JFIN 8.62 -6.9
KLX Energy KLXE 8.18 -6.8
Keane FRAC 4.40 -10.8
Lazydays LAZY 4.02 -4.5
LionsGate B LGF.B 7.21 -0.7
LionsGate A LGF.A 7.65 -0.9
Macerich MAC 26.87 -2.3
Macrogenics MGNX 8.43 -1.6
MammothEnergy TUSK 1.65 -6.6
MayvilleEngg MEC 7.70 -33.1
Nesco NSCO 4.75 -2.6
OFSCapNts2026 OFSSI 24.55 0.2
Orbcomm ORBC 3.58 -17.252-Wk %
Stock Sym Hi/Lo Chg
OnTrackInnov OTIV 0.17 -5.6
Owens-Illinois OI 8.34 -0.3
OxfordSquare OXSQ 5.02 -12.7
PDC Energy PDCE 20.16 -5.9
PagerDuty PD 21.80 1.6
ParatekPharma PRTK 2.86 -4.2
PAVmedWt PAVMW 0.05 -30.5
PeabodyEnergy BTU 11.55 -5.1
PennantPark PNNT 6.03 -0.2
Personalis PSNL 9.65 2.5
PlainsAllAmPipe PAA 18.08 -0.1
PlainsGP PAGP 18.57 -0.3
PolarityTE PTE 2.10 -7.4
QuadGraphics QUAD 4.84 -57.0
RPC RES 4.10 -8.8
RealNetworks RNWK 1.34 ...
Revolve RVLV 20.22 2.8
RosehillRscsUn ROSEU 1.70 -8.1
SINOPEC SHI 27.92 -0.6
SRC Energy SRCI 3.16 -6.1
Safe-T SFET 7.46 -3.6
SiriusIntlIns SG 6.75 -3.6
SixFlags SIX 42.49 -1.4
SonimTech SONM 2.50 -21.6
SundialGrowers SNDL 3.35 -4.5
TarenaIntl TEDU 0.69 3.1
TargetHosp TH 5.21 -1.8
TaubmanCtrs TCO 35.35 -7.9
TitanPharm TTNP 0.16 9.3
TransEnterix TRXC 0.21 -29.1
TransGlobeEner TGA 1.16 -1.3
TreviTherap TRVI 3.07 -7.5
Tupperware TUP 10.15 -34.6
Unit UNT 2.12 -11.7
VerbTechnologyWt VERBW 0.23 3.7
Veritone VERI 2.62 -3.2
Viacom B VIAB 20.96 -2.0
VircoMfg VIRC 3.30 -8.4
Waitr WTRH 0.41 2.3
XinyuanRealEst XIN 3.59 -5.6
Yield10Bioscience YTEN 0.34 -10.252-Wk %
Stock Sym Hi/Lo ChgNew Highs and Lows | WSJ.com/newhighs
The following explanations apply to the New York Stock Exchange, NYSE Arca, NYSE American
and Nasdaq Stock Market stocks that hit a new 52-week intraday high or low in the latest
session. % CHG -Daily percentage change from the previous trading session.Credit Suisse, like other
banks in Switzerland, is grap-
pling with negative interest
rates, which it is passing along
to certain clients. Mr. Thiam
said the bank has had conver-
sations with clients about the
levels of cash they are carry-
ing and switching into other
investments. The bank told its
private banking clients in Sep-
tember that it would charge
negative interest rates on
more than 2 million francs in
cash. The bank said it ex-
pected a seasonal slowdown in
the final quarter of the year,
due to the holiday season.
Brexit and U.S.-China trade
tensions may make investors
more cautious, it added.
The bank’s global markets
division swung to a 269 mil-
lion franc pretax profit from a
loss of 96 million francs. But
total private bank pretax
profit, excluding the gain from
the fund platform sale, was
10% below consensus, Citi-
group analysts said. Net new
money across those units of
5.6 billion francs was also
“slightly soft” versus consen-
sus, they said.
One of the bank’s units, its
Swiss universal bank, had out-
flows of 600 million francs in
the quarter, while net revenue
from private clients in that
unit was down 2%. Excluding
the gain from the fund plat-
form transaction, overall net
revenues for the unit would
also have been down 2%.Credit Suisse Group AG’s
profit more than doubled dur-
ing the third quarter on the
back of strong results in
global markets and the sale of
a fund platform, though re-
sults in its core wealth man-
agement units were weaker.
Net profit rose to 881 mil-
lion Swiss francs ($887 mil-
lion) from 424 million francs a
year ago. Revenue grew 9% to
5.3 billion francs. Excluding
the sale of its fund platform,
revenues rose 2% and pretax
income rose 21%.
Shares of Credit Suisse in
Switzerland fell 2.6%. The
bank’s performance was bol-
stered by an improvement in
its more volatile sales and
trading businesses, while re-
sults at the core wealth man-
agement units, which tend to
produce more reliable reve-
nues, missed expectations.
The results follow a scandal
related to the surveillance of
the bank’s former wealth-man-
agement chief, Iqbal Khan,
earlier this year. This led to
the resignation of the bank’s
operating chief, a close deputy
of Chief Executive Tidjane
Thiam, who was cleared of in-
volvement in a probe ordered
by Credit Suisse Mr. Thiam
said Wednesday that he hadn’t
“directly or indirectly” autho-
rized the surveillance and that
it was an isolated incident.BYJULIESTEINBERG
ANDPIETROLOMBARDISale of Platform
Helps Push Profit
Up at Credit Suisse
cer James von Moltke declined
to quantify on a conference
call. He called the fixed-income
results a “mixed picture” but
said the bank is happy with ar-
eas such as currencies trading
and predicts the overall busi-
ness will stabilize.
Banks globally are also suf-fering from low or negative in-
terest rates, with that pro-
longed weight on profit
exacerbating Deutsche Bank’s
already low-margin retail mar-
ket in Germany.
Deutsche Bank said its four
core business divisions, includ-
ing its investment- and corpo-BANKING & FINANCE
profit of €229 million a year
earlier. Analysts had expected
a loss of about €772 million,
according to FactSet. Revenue
fell 15% to €5.3 billion, com-
pared with a forecast of €5.53
billion.
The net loss largely
stemmed from a €1 billion pre-
tax loss in the new division
where it has stashed busi-
nesses and positions it is sell-
ing or winding down—what
Deutsche Bank calls the Capital
Release Unit, sometimes re-
ferred to as a “bad bank.”
Under its revamp, which in-
cludes about 18,000 planned
job cuts, Deutsche Bank has
largely exited from equities
trading and pulled back from
other money-losing operations
with the aim of focusing on
long-term strengths.
But that has yet to bear
fruit. In the reorganized in-
vestment bank, revenue fell 5%
in the third quarter.
The fixed-income pain came
largely from interest-rate trad-
ing and emerging-markets
debt, including losses in Argen-
tina that Chief Financial Offi-rate-banking units and asset
management, were all profit-
able. Excluding the so-called
bad-bank loss, the core opera-
tions collectively made a pre-
tax profit of €353 million in
the quarter.
Chief Executive Christian
Sewing said the bank’s trans-
formation is on track, and that
the restructuring pain will
make Deutsche Bank leaner
and more focused on serving
European companies at home
and abroad.
The bank said it is on course
to meet its 2019 cost target,
though some analysts pointed
out that third-quarter costs
were slightly higher than ex-
pected.
Mr. von Moltke said loan
growth was consistent with the
bank’s strategy, and that it is
carefully gauging credit qual-
ity. He noted Deutsche Bank’s
relatively stable provisions for
loan losses, adding that those
provisions are likely to go up,
but calling that an anticipated
“normalization.”
Executives still expect
Deutsche Bank to return toprofitability or at least break
even next year, Mr. von Moltke
said Wednesday.
Corporate-bank revenue was
up 6%, including an 8% in-
crease in transaction-banking
revenue. Overall private-bank
and asset-management reve-
nue were down 3% and 4%, re-
spectively. DWS, the asset-
management arm, attracted
net inflows.
Mr. von Moltke told report-
ers that nothing in the results
since July has led the bank to
consider closing more busi-
nesses or lopping off more
products than it already has
planned or announced.
But executives have also ac-
knowledged that investors
have heard many restructuring
promises before, only to be
disappointed when cuts failed
to bring stability. The bank,
which is almost 150 years old,
has had years of senior man-
agement turmoil and lost top
bankers. Investors aren’t con-
vinced that the latest plan will
succeed, either, analysts say.
—Pietro Lombardi
contributed to this article.Deutsche Bank AG posted
its second straight quarterly
loss, as the troubled lender ab-
sorbed costs from its sweeping
restructuring and its key fixed-
income business performed
poorly.
Shares in the bank closed
down 7.9% Wednesday, among
the weakest performers in the
Stoxx Europe 600 index. The
stock had its steepest daily fall
since September 2016, accord-
ing to FactSet.
Fixed-income trading, con-
sidered a core strength of
Deutsche Bank, suffered a 13%
revenue decline in the third
quarter. The poor performance
was an anomaly among most
peers. Morgan Stanley , Bar-
clays PLC and JPMorgan
Chase & Co. achieved double-
digit gains in fixed-income
trading revenue in the third
quarter compared with a year
earlier.
Overall, the bank Wednes-
day reported an €832 million
($924 million) third-quarter
net loss, compared with aBYJENNYSTRASBURGDeutsche Bank Slumps on Weak Trading
Poor performance in the fixed-income business and
broader revenue declines hurt third-quarter results.Performanceoverthe
pastthreedays*Third-quarterfixedincome
revenue2019,changefrom
ayearearlier†*Through 12:05 p.m. ET Wednesday †Based on local currency reporting
Sources: FactSet (stock, index); the companies (revenue)2–10–8–6–4–20%Oct. 28 29 30DeutscheBanksharesStoxxEurope
600IndexMorgan StanleyBarclaysJPMorganGoldman SachsBank of AmericaCitigroupDeutsche Bank21%1915830–3the charge was mostly due to
a challenging regulatory envi-
ronment, such as the negative
impact of “ringfencing” rules,
under which U.K. lenders
must separate retail banking
from riskier investment-bank-
ing operations. A €103 million
charge was booked on missold
payment protection insur-
ance.
The bank’s core Tier 1 ratio
was 11.3% in September, un-
changed from the end of June.Banco Santander SA said
third-quarter net profit fell
sharply as it reported a €1.49
billion ($1.65 billion) charge
related to its U.K. business,
which has been hit by Brexit
and regulatory changes.
Net profit fell 75% to €501
million, the Spanish bank
said. Total income rose 6% to
€12.47 billion.
The lender said previouslyBYPIETROLOMBARDISantander Earnings Hurt
By Charge Tied to U.K. Unit
wsj_20191031_b010_p2jw304000_2_b01000_1________xa2019.crop.pdf 1 31-Oct-19 06:08:27