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What analysts are watching for in Deutsche Bank earnings

Deutsche Bank CEO John Cryan
Daniel Roland | AFP | Getty Images

When a struggling Deutsche Bank reports third-quarter earnings, investors will focus on capital levels and management commentary.

The earnings call, set for early Thursday morning New York time, is the first since mid-September media reports that the U.S. Department of Justice is demanding what could be a $14 billion settlement for Deutsche Bank's former sales practices for mortgage-backed securities.

The large size of the DOJ's proposed fine brought the already struggling bank under increased scrutiny by U.S. investors, and the New York-traded Deutsche Bank shares fell to record lows at the end of September.

Shares have since recovered to trade near levels from just before the DOJ news report. But the bank's ability to implement a restructuring plan successfully remains a concern, especially after the International Monetary Fund said in June that the bank "appears to be the most important net contributor to systemic risks in the global banking system."

When Deutsche Bank reports earnings, "I am looking at three things in general, which are capital levels, overall progress on costs, and general execution on the core business," Stephen Ellis, director of financial services equity research at Morningstar, said in an email. Morningstar has a four-star rating on Deutsche Bank, just above its three-star "fair return" rating.