FRANKFURT: Deutsche Bank plunged to a bigger than expected loss of 5.7 billion euros ($6.3bn) last year, its fifth in a row, as the cost of its latest turnaround attempt hit earnings.
Misconduct scandals, a failed attempt to take on Wall Street heavyweights and, more recently, an aborted merger with Commerzbank mean Germany’s biggest bank is still in recovery mode more than a decade on from the global financial crisis.
The latest attempt, under CEO Christian Sewing, is a 7.4bn euro drive to cut 18,000 jobs, shrink its investment bank and focus on corporate as well as private banking.
But its efforts are being hindered by a faltering global economy and ultra-low euro zone interest rates.
“Our new strategy is gaining traction,” Sewing said yesterday, noting revenues had stabilised in the second half of 2019, cost cutting was on track, the bank’s capital position had improved and the net loss was entirely down to revamp costs.
But the 1.6bn euros loss attributable to Deutsche Bank shareholders in the fourth quarter was larger than analysts’ mean forecast of 1bn, leading the full-year result to miss expectations of a 5bn euros loss.
The results conclude a turbulent decade for Deutsche, including a cumulative loss of 15bn euros over the last five years and an 82pc plunge in the shares over the decade.
In contrast, US rival JPMorgan Chase & Company posted its biggest-ever profit last year as its bond trading business bounced back in the last quarter of the year.
For analysts and investors, Deutsche’s ability to generate revenue has been a major concern. The bank has repeatedly trimmed its forecasts.
Revenue fell 4pc in the fourth quarter to 5.3bn euros and was down 8pc for the year to 23.2 billion euros.
The quarterly figure included a 5pc drop in corporate banking and a 4pc decline at the private bank.