We got the internal Deutsche Bank memo on its bombed-out share price which says it doesn't need to raise money

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Deutsche Bank sent a memo, seen by Business Insider, to staff reassuring them of the bank's financial position and coaching them on what to tell clients who ask about the company's bombed-out share price.

Deutsche Bank shares crashed to a 33-year low this week, amid concerns about big fines in the US and the bank's general financial health.Investing.com

Shares began crashing after the Wall Street Journal reported that the US Department of Justice is seeking a $14 billion (£10.7 billion, €12.4 billion) settlement with the bank over misselling mortgage-backed securities in the run-up to the financial crisis. This led to fears that the bank would have to raise additional capital, as the floated figure is well above Deutsche Bank's settlement reserves.

In an internal memo to staff, seen by Business Insider, the bank repeats its line that it has "no intention to settle these potential civil claims anywhere near the opening position of $14 billion." It adds: "Regarding litigation, we are confident we can put some important cases behind us in the near future."

Deutsche Bank also reassures employees about its financial position in the memo, sent to staff on Tuesday. The bank says it has "no current plans to raise capital" and emphasises that it has ample reserves to cover debt payments.

The memo reads:

"CDS spreads which reflect risk of our senior unsecured debt are no longer an especially reliable proxy for probability of default. Thin volumes amplify price movements. Year-to-date, Deutsche Bank's funding costs have been substantially lower than CDS spreads indicate."

CDS stands for "credit default swap" and is basically a form of insurance against Deutsche Bank defaulting on its debt. The price of this insurance has been going up, signalling that the market thinks a default is more likely. But the bank argued in the note that the price does not reflect its underlying business and is more down to a few people making bullish bets than reality.

The bank told staff that the share price "reflects a number of uncertainties regarding the macroeconomic environment, interest rates and the consequences of the Brexit vote, but also regarding DB-specific factors like litigation."

Deutsche Bank is a "much safer and stronger bank than it was before the financial crisis," the memo says, adding that "depositors enjoy very significant protection."

Deutsche Bank declined to comment on the memo when contacted by Business Insider.

As well as reassuring staff privately, Deutsche Bank management have begun a public defence of the share price. An interview with CEO John Cryan was published in Bild, Germany's best-selling daily, on Wednesday morning carrying the headline: "State aid is not an issue."

The action appears to be working. Deutsche Bank shares opened over 3% higher on Wednesday, suggesting a possible end to 4 days of steep falls.Investing.com

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Germany is denying it's preparing to bailout Deutsche Bank

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German Chancellor Angela Merkel REUTERS/Hannibal Hanschke

The German government has denied claims that it is in the process of preparing a bailout package for the country's biggest lender, Deutsche Bank.

Earlier on Wednesday, German newspaper Die Zeit reported that officials in the state are in the process of preparing for the prospect that Deutsche will need some form of state assistance if it is forced to pay a $14 billion (£10.7 billion) fine by the US Department of Justice.

Deutsche Bank faces billions in legal costs and settlements with US authorities over an investigation into sales of mortgage-backed securities, which would leave the bank seriously undercapitalised.

As a result, Zeit reported, Berlin is now preparing for the worst, saying: "The project is top secret, only about half a dozen top officials in Berlin, Frankfurt and Brussels are in the know. They are preparing for an eventuality that would shake the country and that only a few weeks ago was seen as completely unthinkable: the destabilisation of Deutsche Bank," said the paper (roughly translated from the original German).

In the worst case scenario, Zeit said, the government could be prepared to take a 25% stake in the bank, similar to the bailouts of RBS and Lloyds by the British government during the financial crisis.

However, the German finance ministry has now flatly denied that any such talks are happening, calling Zeit's report "false."

"This report is false," spokeswoman Nadine Kalwey wrote in a statement cited by Reuters. "The federal government is preparing no rescue plans. There is no reason for such speculation. The bank has said that clearly."

Earlier in the day, in an interview with another German newspaper, Bild, Deutsche Bank's CEO John Cryan denied any possibility of the bank needing help from Berlin, saying: "State aid is not an issue."John Cryan, Deutsche Bank's CEOAP Photo/Michael Probst

The bank has also internally downplayed the severity of its troubles. In a memo sent to staff on Tuesday, seen by Business Insider, the bank reassured employees about its financial position. The bank says it has "no current plans to raise capital" and emphasised that it has ample reserves to cover debt payments.

Deutsche also repeated its line that it has "no intention to settle these potential civil claims anywhere near the opening position of $14 billion." It added: "Regarding litigation, we are confident we can put some important cases behind us in the near future."

Deutsche's stock dropped to a record low on Monday, falling below €10.50 (£9.05) per share for the first time in its history. Since then, however, it has rebounded a little, and during morning trading on Wednesday, shares were up as much 3% to €10.87 (£9.37). Deutsche's early gains on Wednesday were helped by confirmation that it has sold Abbey Life Assurance to Phoenix Group, something that the bank says will have "a net positive" impact on its capital position.

Since then shares have pulled back a little and are currently trading at €10.82 (£9.32), up by around 2.55% as of 12:00 p.m. BST (7:00 a.m. ET).

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Wells Fargo CEO will forfeit $41 million in pay after banking scandal

• Ken Sweet, Associated Press

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Wells Fargo's John Stumpf joins other TARP recipient financial institution leaders as they testify before House Financial Services Committee on Capitol Hill in Washington, February 11, 2009Larry Downing/Reuters

WASHINGTON (AP) — Wells Fargo says CEO John Stumpf and the executive who ran the bank's retail banking division will forfeit tens of millions of dollars in bonuses as the bank tries to stem a scandal over its sales practices.

The board of directors at the nation's second-largest bank said Tuesday that Stumpf will forfeit $41 million in stock awards, while former retail banking executive Carrie Tolstedt will forfeit $19 million of her stock awards, effective immediately. Both are also giving up any bonuses for 2016, and Tolstedt will not receive any severance or any other compensation in connection with her retirement, the bank's directors said.

The San Francisco-based bank's independent directors are also launching their own investigation, hiring the law firm Shearman & Sterling to assist them.

In their announcement, Wells Fargo's independent directors said the pay clawbacks did not preclude the board from pursuing more salary clawbacks from Stumpf or Tolstedt.

"We will proceed with a sense of urgency but will take the time we need to conduct a thorough investigation," Stephen Sanger, Wells Fargo's lead independent director, said in a statement.

Wells Fargo had been under pressure from lawmakers and others to implement its executive compensation clawback provisions after the bank agreed to pay $185 million to settle allegations its employees opened millions of accounts without customers' permission to reach aggressive sales targets.

Stumpf has faced bipartisan outrage for his handling of the scandal. Republican Sen. Bob Corker of Tennessee said at a Banking Committee hearing where Stumpf testified last week that it would be "malpractice" if Wells Fargo didn't institute any compensation clawbacks. Democratic Sen. Elizabeth Warren of Massachusetts told Stumpf he should resign and "give back the money you took while the scam was going on."

Stumpf, a 34-year veteran of Wells Fargo and CEO since 2007, earned $19.3 million last year. Tolstedt announced her retirement in July and had been expected to leave with as much as $125 million in salary, stock options and other compensation.

The consumer banking giant, which is the biggest U.S. mortgage lender, has fired about 5,300 employees over the sales practices. Lawmakers told Stumpf at the hearing those dismissals didn't go high enough up the chain.

Stumpf was long admired for keeping Wells — until recently — free of scandal. The bank did not invest in as many toxic mortgages in the 2000s as its counterparts, and Stumpf initially declined to take bailout money from Washington before accepting it in a sign of solidarity.

He also was able to expand Wells significantly as a result of the crisis, buying up Wachovia. That gave the bank known for its stagecoach logo, which was primarily a West Coast and Southern bank, access to the lucrative East Coast and New York banking markets.

Stumpf was also well-known in the banking industry for his company's ability to sell products to customers. While quotas varied by branch size and other factors, a typical employee had to sell between 13 and 15 banking products a day — a new account, a mortgage, a retirement account, or even online banking. The targets were high even in small towns.

Federal and local authorities said Wells Fargo & Co. employees trying to meet those targets opened bank and credit card accounts, moved money between those accounts and even created fake email addresses to sign customers up for online banking — all without customer authorization. Debit cards were issued and activated, as well as PINs created, without customers' knowledge.

The Labor Department is investigating whether Wells Fargo abused its employees while driving them to meet the lofty sales targets. The bank says it has refunded to customers $2.6 million in fees charged for products that were sold without authorization.

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RBS is paying $1.1 billion to settle 'toxic' mortgage mis-selling claims in the US

• Oscar Williams-Grut
 

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Royal Bank of Scotland chief executive Ross McEwan Reuters

Royal Bank of Scotland (RBS) is paying $1.1 billion (£850 million) to settle two claims it mis-sold "toxic" mortgage security products to US credit unions in the US in the run-up to the 2008 financial crisis.

RBS' US subsidiary sold mortgage-backed security products to two credit unions — US Central Federal Credit Union and Western Corporate Federal Credit Union — in the run-up to the financial crisis.

The products were so-called "toxic" mortgage-backed securities and when the housing bubble burst, both credit unions failed. RBS admits no wrongdoing under the terms of the settlement.

RBS is paying the sum to the National Credit Union Administration in the US and says the settlement is "substantially covered by existing provisions." The state-owned bank's provisions were $3.8 billion (£2.9 billion) at the end of June, according to the BBC.

The bank is still facing mortgage-backed security claims from the US Federal Housing Finance Agency and an investigation by the US Department of Justice. RBS says in a statement that: "litigation and investigations may require additional provisions in future periods that in aggregate could be materially in excess of the provisions existing as of 30 June 2016."

Here is the full statement from RBS on the settlement, sent to Business Insider over email:

The Royal Bank of Scotland Group plc (RBS Group) has reached a final settlement with the National Credit Union Administration Board to resolve two outstanding civil lawsuits for US$ 1.1 billion (£846 million). The settlements, involving its subsidiary RBS Securities Inc., relate to the two residential mortgage-backed securities (RMBS) cases (asserting claims on behalf of US Central Federal Credit Union and Western Corporate Federal Credit Union), most recently disclosed in RBS’s 2016 Interim Results Announcement (“2016 Interim Results”). The settlement amount is substantially covered by existing provisions as of 30 June 2016 and will have no material impact on the RBS Group’s CET1 ratio.

RBS continues to litigate various other RMBS-related civil claims identified in its disclosure, including those of the Federal Housing Finance Agency, and to respond to investigations by the civil and criminal divisions of the U.S. Department of Justice and various other members of the RMBS Working Group of the Financial Fraud Enforcement Task Force (including several state attorneys general). As previously stated, RMBS litigation and investigations may require additional provisions in future periods that in aggregate could be materially in excess of the provisions existing as of 30 June 2016. Please see RBS’s 2016 Interim Results for further details.

RBS will publish its Q3 2016 results on 28 October.

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Apple is quietly developing 'iPhone 8' hardware in Israel

• Sam Shead
 

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Apple's office in Herzliya, Israel.Sam Shead/Business Insider

Apple  $113.65

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Disclaimer

Apple is using an office in Israel to develop hardware for the "iPhone 8," which is expected to be released next year with a radical redesign, according to an employee at the site.

Details on the iPhone 8 are scarce, but some reports, including this one from MacRumours, suggest that it will have an edge-to-edge display that removes the need for the top and bottom bezels where features like the fingerprint sensor and the front-facing camera are located.

Some hardware for the iPhone 8 is being created in Herzliya, Israel, according to a local Apple employee, who said employees in Israel work on all of Apple's new products.

The employee, whose identity is being concealed by Business Insider, solders components for Apple. This person didn't give too much away about the new handset but said it would be "different" from the iPhone 6s and the iPhone 7, which have been criticised for being too similar to their predecessors.

Speaking with Business Insider outside Apple's Herzliya office at Maskit Street 12, the Apple employee said employees in Israel were working on what's coming "next" in Apple's product line, giving a specific mention to the iPhone 8.

The worker used the term "iPhone 8" unprompted in our conversation. That was interesting because the next logical name for the iPhone to be released in 2017 should be "iPhone 7s." The iPhone 8 isn't due until 2018, as Apple has a two-year development cycle for new iPhones. Some observers have noted, however, that the iPhone 7 was a largely incremental update. S-series iPhones are also supposed to be incremental updates, but the phone that is coming in the 2017 "iPhone 7s" slot is expected to be a much more dramatic improvement to the line. So some people believe that Apple might break its naming tradition in 2017, skip iPhone 7s, and give the iPhone a new number or name out of step with the current sequence. "iPhone 8" would be one option.

The source added that the iPhone 8 would have a better camera than that of the iPhone 6s and the iPhone 7 — something that is fairly standard when a new iPhone enters the market.

The employee was informed at the start of the conversation that they were talking to a journalist. When asked what Apple uses the Herzliya facility for, the source (who spoke only broken English) said "new products." The person added that Apple didn't actually assemble products in Israel.

A second Apple employee whom Business Insider spoke with in Herzliya said they "couldn't talk" about what Apple did in Herzliya, while an employee from the networking giant Cisco, which also has an office in the area, said: "I have three friends that work there. They work on the hardware side. Verifications. Something like that."

An Apple security guard told Business Insider we could not speak with anyone inside Apple's office without an invitation.

There are about 800 employees at Apple's Herzliya office, which is about four years old and situated approximately 15 kilometers north of Tel Aviv's city centre. The office was set up after Apple acquired two startups: the flash memory designer Anobit in 2012 and the 3D sensor developer PrimeSense in 2013. Apple has since acquired the Israeli camera firm LinX.

Sources close to Apple said the company used the research-and-development facility in Herzliya to develop hardware such as chips, storage, cameras, and wireless technologies. Apple CEO Tim Cook said during a trip to Israel in 2015 that the Herzliya office was Apple's second-largest R&D facility in the world, according to The Times of Israel.

The Cupertino, California-headquartered firm also has an office in Haifa in the north of Israel that is home to about 200 employees.

Avi Hasson, the chief scientist of the Ministry of Economy of the State of Israel, told Business Insider on Monday that almost every major Silicon Valley tech firm had an outpost in Israel, adding that the country was a "fountain of innovation."

An Apple representative said the company did not comment on rumour or speculation.

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People are so excited about this wallet that it’s become the biggest one in Kickstarter history

• Ellen Hoffman, Insider Picks
 

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The Insider Picks team writes about stuff we think you'll like. Business Insider has affiliate partnerships so we may get a share of the revenue from your purchase.

TGT's Americana Deluxe wallet is elasticated and conforms to carry as much, or as little, as needed.TGT Tight Wallets

For all their utility, most wallets are still too bulky for guys to comfortably and discreetly carry in their back pocket. 

Enter the most successful wallet project in Kickstarter history and our pick for the best alternative to the traditional bifold: the TGT (pronounced "tight") wallet.

Brooklyn designer Jack Sutter got the idea for the wallet from a friend who was using a rubber band from a broccoli stem to hold his cards and cash. It was perfect, simple, and small in his pocket. Likewise, TGT wallets offer comfort, lightness, and ample pocket space; and they afford guys the ability to leave unnecessary bags at home. They're also handmade in the US by local craftsmen and artisans.

TGT wallets come in a variety of different colors; the Americana pictured here features red, white, and blue stripes, and is a customer favorite. The Deluxe version of the Americana wallet retails for $46. Have a closer look below:

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TGT produces customized yarns and elastics for its wallets on the East Coast of the US.

TGT Tight Wallets

About that leather: TGT conducted a global search of leather tanneries to find the finest, softest, and most elastic lambskin in the world.

TGT Tight Wallets

When packed with cards and cash, the wallet is still about as slim as an iPhone.

TGT Tight Wallets

Its simple construction eliminates bulk, fits everything you need, and slides effortlessly into your tightest pocket.

TGT Tight Wallets

It's one of the most practical and affordable wallets on the market.

TGT Tight Wallets

You can buy TGT's Americana Deluxe Wallet at AHAlife or TGT's Americana 2.0 Wallet at Amazon. 

You can also shop TGT's store for more options.

This article was originally published on 4/21/2016.  

Disclosure: This post is brought to you by Business Insider's Insider Picks team. We aim to highlight products and services you might find interesting, and if you buy them, we may get a small share of the revenue from the sale from our commerce partners, including Amazon. Jeff Bezos, CEO of Amazon, is an investor in Business Insider through his personal investment company Bezos Expeditions. We operate independently from our advertising sales team. We welcome your feedback. Have something you think we should know about? Email us at insiderpicks@businessinsider.com.

Read the original article on Insider Picks. Copyright 2016. Follow Insider Picks on Twitter.

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