Deutsche Bank CEO: ‘Good progress’ despite full-year loss

Co-CEOs of Deutsche Bank John Cryan pauses, during the annual press conference in Frankfurt, Germany, Thursday, Jan. 28, 2016.

“I recognize that in the fourth quarter we lost some momentum in sales and trading”, Cryan said on Thursday after the bank released full-year earnings.

European banks were among the worst performing sectors after Deutsche Bank reported its first annual loss since 2008, while investors still digest the effects of the EU program set to help Italian banks deal with non-performing loans. The bank said in October it planned to eliminated 26,000 jobs worldwide over the next two years.

“It has been a disappointment”, Chief Financial Officer Marcus Schenck said.

The bank is now mired in a tangle of around 6,000 lawsuits and in May was fined a record 2.5 billion for its involvement in rigging interest rates.

Recently, TheStreet Ratings objectively rated this stock according to its “risk-adjusted” total return prospect over a 12-month investment horizon.

Although, revenue in the fourth quarter cratered by 15% year-on-year to €6.6 billion. This is compared to €2 billion of litigation charges booked in 2014. “It might suggest that the overhaul isn’t going as well as planned”.

The bank reported net revenue of €6.6 billion ($7.2 billion) in the fourth quarter, down 15.4% year over year. Also being retained are the domestic asset-management and corporate-finance businesses, the person said, adding that domestic trading operations will move from Brazil to global hubs. Both report quarterly earnings next week.

Cryan’s efforts to restore investor confidence have been hurt by rising costs tied to past misconduct. Prime-finance revenue, reflecting the bank’s business of providing financing and other services to hedge-fund clients, rose. Noninterest expenses in the quarter included Euro 0.8 billion of expenses for restructuring and severance, predominantly in Private & Business Clients (PBC), and Euro 1.2 billion of litigation charges.

Cryan said the bank would face further legal expenses in 2016 as it pushes to settle remaining litigation “as soon as possible”.

In 2015 we made considerable progress on the implementation of our strategy. “Restructuring work will continue throughout the year, including preparing for the deconsolidation of Postbank, rationalising our branch network, and developing better digital banking capabilities”, Cryan said. “We know that periods of restructuring can be challenging”.

The much-needed decisions we took in the second half of the year contributed to a net loss for the fourth quarter and full year.’ He added: ‘We are focused on 2016 and continue to work hard to clear up our legacy issues.