Deutsche Bank chief Cryan tries to reassure on bank's strength

The chief executive of troubled Deutsche Bank has emailed the 100,000 staff to reassure them that the German giant's finances are strong.

John Cryan told them the bank had become the object of "hefty speculation" and that "new rumours" were causing the share price to fall.

He said the bank's reserves and profits underlined its strength.

The shares had fallen again on Friday, but closed 6.4% up on rumours that a huge US fine could be reduced.

In his letter, Mr Cryan pointed out that Deutsche had €215bn in reserves and made €1bn in profits for the last six month. At no point in the last 20 years had Deutsche been as strong as it is now, Mr Cryan insisted.

"The release of the memo... seems to have taken the edge off of the German company's dramatic" share price decline, said SpreadEx analyst Connor Campbell.

At the start of trading on Friday, Deutsche's share fell 9%. That followed a big fall overnight in the bank's Wall Street-listed shares, a drop sparked by reports that some hedge funds had withdrawn money from the bank.

$14bn fine

Deutsche Bank is under the most pressure of any bank since the financial crisis.

Investors are increasingly worried about the financial health of the bank, which faces a $14bn fine in the US for mis-selling mortgage-backed bonds before the financial crisis of 2008.

The bank's shares have been falling steadily from a recent high of €27.80 last November. But at their peak in May 2007, before the start of the banking crisis, the shares were valued at almost €100.

Earlier on Friday, the chairman of the Eurogroup of eurozone finance ministers, Jeroen Dijsselbloem, said the penalty was excessive.

"The $14bn are going to the American authorities. I don't begrudge the American authorities that money, but it is money that has to be paid by European account holders and investors. The fine is too high," he said.

However, Deutsche's shares closed up 6.4% on Friday, following unconfirmed reports that the bank was close to agreeing a reduction in the fine with the US Department of Justice.

Unpopular

Deutsche's woes hit bank shares across Europe. German rival Commerzbank was down about 6%, while the shares in UK, Swiss, French and Italian banks also suffered.