FRANKFURT-Deutsche Bank AG shares nose dived early Friday, hitting new multiyear lows on news some major clients have moved to withdraw billions of dollars from the bank because of concerns about its stability.
"It's a pitch black start to the last day of the quarter for both Deutsche Bank and the German stock market," said Jochen Stanzl, analyst at CMC Markets in Frankfurt.
At 0930 GMT, Deutsche Bank shares were trading down 5.5% at ?10.28. The lender's stock has fallen more than 50% this year.
"There's next to no one who wants to catch a falling knife," said a Frankfurt trader.
Deutsche Bank news weighed on markets in the U.S. and Asia overnight and hit European banking shares early Friday. The Eurostoxx banking index traded 3.7% lower midmorning at 88.17 points.
The rout in Deutsche Bank shares has picked up steam in past sessions, after The Wall Street Journal reported two weeks ago that the U.S. Justice Department had proposed it pay $14 billion to settle a mortgage-securities investigation. The bank has said it was unlikely to pay "anywhere near" that amount.
This week major clients have taken steps to pull billions in securities or cash from the bank, people close to the clients and the bank said late Thursday. Institutions reducing their exposure include AQR Capital Management LLC, Capula Investment Management LLP, Citadel LLC, Luxor Capital Group LP, Magnetar Capital LLC and Millennium Management LLC, these people said.
The amounts of assets either withdrawn or set for withdrawal are in the billions of dollars, a fraction of the hundreds of billions of dollars the bank has in deposits.
Deutsche said in a statement it is confident the vast majority of investors understand its stable financial position and strategy progress.
Rob Copeland and Jenny Strasburg contributed to this article.