The reasons for this vary from one institution to the next. But there are some challenges that affect them all in equal measure. As I see it, three key factors are at play here. First, the persistent low-interest-rate environment, which is bringing to light the weak profitability afflicting many German institutions.
Regarding corporate bonds outstanding, recent years have witnessed little change in the relative shares of investment-grade bonds and high-yield bonds. Credit quality has deteriorated within the investment-grade segment, where the share of bonds rated at the lowest investment-grade level has reached near-record levels. As of mid-2019, just over half of investment-grade corporate bonds outstanding were at the lowest end of the investment-grade segment.