Steve Eisman, whose prediction of the 2008 subprime mortgage collapse was subsequently immortalized in book and film as “The Big Short,” is telling investors they should short Deutsche Bank shares. Deutsche Bank is one of Europe’s top five largest banks by assets.
Mr. Eisman calls Deutsche Bank a “problem bank,” and says it needs to shrink. Bloomberg’s Peter Vercoe and Yvonne Man report:
โDeutsche Bank is a problem bank,โ Eisman said in a Bloomberg Television interview in Hong Kong. The German lender has โprofitability issues,โ and will probably have to raise capital next year, he said, without disclosing his position on the shares. A Deutsche Bank representative declined to comment on the remarks.
New Chief Executive Officer Christian Sewing is embarking on aย sweeping overhaulย of the struggling investment bank to focus more on European clients, walking away from ambitions to be a top global securities firm. Germanyโs largest lender will scale back U.S. rates sales and trading, reduce the corporate finance business in the U.S. and Asia and review its global equities business. The measures will lead to a โsignificant reductionโ in the workforce this year.
The firm has to โshrink dramatically,โ Eisman said.
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