FRANKFURT AM MAIN, Jan 30 — Germany’s biggest lender Deutsche Bank said today that it lost €5.7 billion (US$6.3 billion) in 2019, its fifth annual loss in a row and its second-worst ever result.
Deutsche’s net result was significantly worse than the €5.3-billion loss forecast by analysts surveyed by Factset, dragged down by the costs of a massive restructuring launched in July.
2019’s loss was “entirely driven by transformation-related effects,” the bank said in a statement.
A total of €3 billion went on charges, writedowns in the value of intangible “goodwill” assets and costs relating to the restructuring and severance pay for the first among over 18,000 planned job cuts.
Deutsche slashed its payroll in 2019 by 4,100, to around 87,600, it added.
Meanwhile tax effects related to the restructuring weighed on the bottom line to the tune of €2.8 billion.
Deutsche reported revenues of €23.2 billion, down 8 per cent year-on-year, and a pre-tax loss of 2.6 billion.
Nevertheless, “our new strategy is gaining traction,” chief executive Christian Sewing insisted in a statement.
Deutsche says that 70 per cent of the costs it expects from the restructuring up to 2022 have now been accounted for in its results.
And 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 it ventured into during its breakneck expansion prior to the financial crisis.
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, Deutsche said.
Meanwhile a unit set up to divest assets not useful to the bank’s new strategy reduced its holdings from €56 to €46 billion in the fourth quarter alone, while making a pre-tax loss of €3.2 billion over the year.
Looking back to 2018, the bank as a whole was forced to revise its result for that year down from a €267-million profit to a €52-million loss. — AFP