LONDON, April 27 (Reuters Breakingviews) - In the weeks following the collapse of Silicon Valley Bank and Credit Suisse (CSGN.S), investors wondered who might be next. Some alighted on Deutsche Bank (DBKGn.DE), the erstwhile whipping boy of European banking. Its shares fell more than a tenth in a single morning in late March. That seemed questionable at the time. The 20 billion euro lender’s first-quarter results, released on Thursday, offer further comfort.
True, the bank’s total deposits fell by 29 billion euros, or roughly 5%, between Dec. 31 and March 31. But that should not worry CEO Christian Sewing too much. Most lenders are losing cash as central banks hike interest rates, prodding companies and households to move into higher-yielding alternatives. In Banco Santander’s (SAN.MC) European business, customer deposits also fell roughly 5% over the same period.
And the German lender seems to have a relatively solid funding base: nearly 80% of its German retail deposits are insured. Meanwhile, three-quarters of corporate banking deposits either have a fixed term or are used as part of the customers’ operations, making them stickier. Deutsche, previously the basket-case of European banking, was always a likely target for investors hunting for the next weak link. But, in this case, the panic doesn’t seem to have been justified. (By Liam Proud)
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