StockCall Scrutinizes Deutsche Bank AG and ICICI Bank Ltd.: Foreign Banks to Face Stringent Fed Rules

Feb 14, 2013, 08:00 ET from

LONDON, February 14, 2013 /PRNewswire/ --

Foreign bank stocks provide an excellent way to diversify your portfolio. While foreign banks have to comply with Fed regulations, these entities are more closely tied by their home country regulations. In certain cases, even Fed has different rules for domestic and foreign banks. Until now, foreign banks had more relaxed capital adequacy norms. However, Fed is looking to change the rules and foreign banks like Deutsche Bank AG (NYSE: DB) expressed their resentment towards the changes. Foreign banks are also better cushioned against regional changes. Banks like ICICI Bank Ltd. (NYSE: IBN) reported solid quarterly results. StockCall reviewed the solar industry and chose Deutsche Bank AG and ICICI Bank Ltd. for its technical coverage. These free reports can be seen for free at

Deutsche Bank Criticizes Fed Move

Deutsche Bank reported dismal quarterly results. Its net loss stood at $3 billion, down from net income of $241 million seen in the prior year's quarter. The losses are mainly attributed to restructuring and litigation charges. However, the bank reported higher revenues. It reported its full year net income at $862 million, down from $5.6 billion for the previous year. Download the free research on Deutsche Bank AG by signing up now at

Deutsche Bank is one of the leading European banks. However, its U.S. operations are getting adversely affected by new Federal Reserve rules about capital adequacy norms. The bank is apprehensive that new rules will have negative impact on its margins. Fed now requires foreign banks to have the same financial buffer as that of their American counterparts for their U.S. operations.

Deutsche Bank reported better performance for its corporate banking and securities segment, while its Asset and Wealth Management segment languished. For its long-term viability, the bank is reducing its risk weighted assets. It is also on track to confirm to Basel 3 risk norms. Deutsche Bank is expected to take cost-cutting measures. It is also expected to reduce complexity. Since, Europe is still struggling with its currency and other issues; the bank's stock is unlikely to make any major upward move in the near future. However, it is a good stock to consider for long-term investment.

ICICI Bank Delivers Solid Q3 Results

ICICI Bank is one of the leading banks in India and posted healthy results for its third quarter. Its net income for fiscal third quarter jumped 30 percent to $409 million. The bank is on an expansion spree and opened a number of new branches, causing its operating expenses to increase by 18 percent. Even with its global presence, the bank is mainly invested in India and is more susceptible to policy changes in India regulatory environment. Register for today's free analysis on ICICI Bank Ltd. at

The bank is heavily dependent on its domestic loan portfolio, making it difficult for U.S. investors to assess its risk profile. However, it posted good growth for loans and deposits and expects to retain this momentum. The bank mainly works in high interest rate environment, putting pressure on its performance. ICICI Bank stock has delivered 18 percent return in past 52 weeks. On the back of its solid quarterly results, the stock is likely to make upward movements in the near future. It also offers 1.29 percent dividend yield. However, investors should remain careful as foreign bank stocks are more likely to react to policy changes in their home country and as such it may be difficult to assess their risk profile.

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