Big Scandals and Big Losses for Big Bank Stocks
It’s a case of big banks (allegedly) behaving badly. And investors in certain bank stocks are being punished harshly for it.
Two separate scandals have taken the banking world by storm. And two financial services giants are taking hits that may be very difficult to recover from.
For Goldman Sachs (GS), the investment bank has been entangled in allegations that it was paid substantial fees for deals involving the Malaysian government’s state investment fund. Billions of dollars were later found to be stolen in those deals. Goldman’s stock dropped precipitously after the revelation earlier this month, and just hit a new two-year low on Friday. Year to date, the stock is now down a whopping 25%.
The situation is even worse for Deutsche Bank (DB), the German banking behemoth. It’s being investigated for its possible role in facilitating criminal money laundering through offshore tax havens, along with other major European banks. DB stock hit a new all-time low on Friday just slightly above $9 per share. Year to date, the stock has been cut by more than half.
Overall, banking and financial services stocks have not done well this year at all – not by a long shot. While this could change going into 2019, GS and DB are two scandal-plagued stocks that are likely to be pressured heavily for quite some time.
IMPORTANT: The information above should not be construed as investment advice and should not be considered as a solicitation to buy or sell securities. Past performance is not indicative of future results. Trading and investing in the financial markets involves substantial risk of loss, and may not be suitable for all investors.