LONDON (Reuters) – Shares in Deutsche Bank (DBKGn.DE) fell on Friday after the cost of insuring the bank’s debt against default reached its highest level in more than four years, highlighting investor concerns about Europe’s stability. banks.

The region’s banking sector experienced difficulty in the past week, with the bailout of state-backed Credit Suisse and unrest among regional US banks raising concerns about the health of the global banking sector.

Deutsche shares, which have lost more than a fifth of their value so far this month, fell as much as 14.9% on Friday to their lowest in five months. Shares were last down 13 percent at 8.13 euros ($9.16).

Germany’s largest bank has seen $3 billion wiped off its market value in just one week.

Deutsche Bank’s credit default swaps (CDS) — a form of insurance for bondholders — rose above 220 basis points — the most since late 2018 — from 142 basis points just two days ago, according to data from S&P Market Intelligence.

On Thursday, Deutsche CDS posted its biggest single-day gain ever, based on Refinitiv data. But it is still well below the high levels of close to 300 basis points recorded during the eurozone debt crisis in 2011.

The default swaps of major European banks rose across the board on Friday, reflecting investors’ reluctance to take any risk on their portfolios this weekend.

“Deutsche Bank has been in the spotlight for a while now, in a similar way that Credit Suisse has been,” said Stuart Cole, chief macro economist at Equiti Capital. “It has gone through several restructurings and leadership changes in attempts to get it back on solid ground, but so far none of those efforts seem to have really worked.”

Contacted by Reuters, Deutsche Bank declined to comment.

German financial industry regulator BaFin did not comment.

Meanwhile, some Deutsche Bank bonds were sold as well. Its additional 7.5% Tier 1 dollar notes fell about 6 cents to 70.054 cents on the dollar, pushing the yield to 27%. . This return is three times what it was just two weeks ago, based on Tradeweb data.

Not a copy from 2008

Despite the turmoil, market watchers highlight that European regulators and central banks have reiterated their determination to keep markets stable, and that banks themselves are better capitalized and regulated than they were in 2007 before the global financial crisis.

“We have no concerns about the viability of Deutsche or the asset labels. And to be absolutely clear – Deutsche is not the next Credit Suisse bank,” said a report by independent researcher Autonomous.

“Judging by movements in Deutsche (Deutsche’s) Deutsche Bank’s credit default swaps (CDS) and share price, investors are concerned about the bank’s health. We are relatively comfortable given Deutsche’s strong capital and liquidity positions,” she said.

Bank-issued AT1s have come under pressure since Credit Suisse was forced to write down $17 billion from its AT1s as part of a forced takeover by UBS (UBSG.S) over the weekend.

“The ramifications of the AT1 bond wipeout in the CS bailout have called into question a key part of the bank’s financing, making the problems that DB faced even more difficult to overcome,” Cole said.

The STOXX 600 European Banks Index – which does not include Credit Suisse or UBS shares – had one of the most volatile trading weeks in a year. The index was last down 5.1%, heading for a monthly decline of nearly 20%.

Separately, Deutsche Bank said it would redeem $1.5 billion in a batch of Tier 2 notes due in 2028. The bank had already issued a new, similar bond in February, which is designed to replace notes the bank is now redeeming.

($1 = 0.9273 euros)

(Reporting by Amanda Cooper and Chiara Ellisi in London, with additional reporting by Ankur Banerjee in Singapore and Tom Sims in Frankfurt); Editing by Dara Ranasinghe and Jane Merriman

Our Standards: The Thomson Reuters Trust Principles.

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