Deutsche Bank AG, Germany’s biggest lender, yesterday said it lost 5.7 billion euros (US$6.3 billion) last year, its fifth annual loss in a row and second-worst result ever.
Deutsche’s net result was dragged down by the costs of a massive restructuring launched in July — and significantly worse than the loss of 5.3 billion euros forecast by analysts surveyed by Factset.
Last year’s loss was “entirely driven by transformation-related effects,” the bank said in a statement.
A total of 3 billion euros went on charges, write-downs in the value of intangible “goodwill” assets, and costs related to the restructuring and severance pay for the first among more than 18,000 planned job cuts.
Deutsche last year slashed its payroll by 4,100, to about 87,600, it added.
Tax effects related to the restructuring weighed on the bottom line to the tune of 2.8 billion euros.
Deutsche reported revenue of 23.2 billion euros, down 8 percent year-on-year, and a pre-tax loss of 2.6 billion euros.
Nevertheless, “our new strategy is gaining traction,” chief executive Christian Sewing said in a statement.
Deutsche said that 70 percent of the costs that it expects from the restructuring up to 2022 have been accounted for in its results.
Despite the losses, “with our strong capital position ... we’re very confident we can finance our transformation with our own resources and return to growth,” Sewing said.
The chief executive’s plan calls for Deutsche to retreat from some of the activities and regions of the world that it ventured into during its breakneck expansion prior to the global financial crisis of 2008.
Instead, bosses want to refocus the bank on its business with corporate clients and its home region of Europe.
Units belonging to that future so-called “core bank” reported a pre-tax profit of 543 million euros, Deutsche said.
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