FRANKFURT (Reuters) – Deutsche Bank (DBKGn.DE) plunged to a bigger than expected loss of 5.7 billion euros ($6.3 billion) 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 7.4-billion 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 on Thursday, 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 1.6 billion euros loss attributable to Deutsche Bank shareholders in the fourth quarter was larger than analysts’ mean forecast of 1 billion, leading the full-year result to miss expectations of a 5 billion euros loss.
The bank’s shares nevertheless erased early losses to rise 4% by mid-afternoon, as investors cheered the bank’s growing capital cushion.
The results conclude a turbulent decade for Deutsche, including a cumulative loss of 15 billion euros over the last five years and an 82% plunge in the shares over the decade.