LONDON — The hedge fund manager famous for betting against the United States housing market in the run-up to the 2008 financial crash says Deutsche Bank is “a problem bank” that must “shrink dramatically.
Speaking to Bloomberg TV, Steve Eisman said: “Deutsche Bank has real profitability issues, they haven’t spent money on technology in a long time, they’re probably under capitalised, I think they’re probably raising capital next year.
“Deutsche Bank is a problem bank, I think it has to shrink dramatically.”
Deutsche Bank in February reported a full year loss of €497 million ($621 million) for 2017, its third year of losses in a row. John Cryan was ousted as CEO in April and his replacement, Christian Sewing, has announced plans to scale back US operations and cut jobs as a result.
Eisman is famous for being the main character in “The Big Short,” the non-fiction book about the 2008 subprime mortgage bubble in the US written by Michael Lewis. Eisman was played by Steve Carrell in the 2015 film adaptation of the book.
Eisman, who is now a money manager at the Neuberger Berman Group, told Bloomberg TV he thought “regulators in the United States did a good job post-crisis” in fixing structural issues but said: “Europe is better, but not good enough.”
Eisman said he couldn’t comment on consolidation among European banks but said: “I think there’s definitely going to be consolidation [of banks] in the United States, which is driven by how much companies like JPMorgan are spending on technology which is $10-11 billion a year, versus the much smaller regional banks.”
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