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A sobering performance

January 28, 2016

Deutsche Bank has logged a record multibillion euro loss for 2015. Germany's biggest lender is still reeling from a series of scandals, with litigation costs and restructuring efforts weighing down the former giant.

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Deutschen Bank building
Image: picture-alliance/dpa/F. Rumpenhorst

Only slightly updating an earlier estimate, Deutsche Bank on Thursday reported through its investor relations website that it logged a fourth-quarter net loss of 2.1 billion euros ($2.28 billion) and a staggering bottom-line loss of 6.8 billion euros for the whole of 2015.

Following its involvement in a number of scandals that had hit the global financial world, the bank has seen its stock price plummet from nearly 50 euros per share in 2011 to a mere 17 euros per share at the beginning of 2016. Performance last year was also hampered by painful write-downs and tough trading conditions.

Deutsche's new CEO, John Cryan, warned employees last July that they should expect a tough course in the months ahead, adding that they must repair a reputation damaged by misconduct.

John Cryan: Deutsche Bank's new co-CEO

Tough times ahead

When Cryan laid out the lender's new strategy in October, he also announced 9,000 job cuts and other painful measures to get the bank on its feet again. Although outsiders may see little progress in the restructuring progress so far, Cryan said Thursday that the bank was on track to achieve its ambitious objectives towards becoming a leaner and more efficient financial institution.

"In 2015, we made considerable progress on the implementation of our strategy," Cryan said in a statement on the lender's website.

"But we know that periods of restructuring can be challenging," he concluded, adding that "I'm confident … that we can transform Deutsche Bank into a stronger, more efficient and better-run institution."

In a bid to drive down overall costs, Deutsche had said that bonuses would be cut, as staff "needed to share part of the burden" from the losses incurred.

Analysts expect 2016 to be the most crucial year in the bank's restructuring process. Litigation costs are set to continue to weigh on the lender's results, although they may not exceed the level recorded last year.

Risk provisions for non-performing loans were likely to rise this year, the lender indicated. It noted, though, that its investments in the crisis-stricken energy sector were only moderate.

hg/jm (Reuters, dpa)