Deutsche Bank Reports Huge Loss for 2019


FRANKFURT — Deutsche Bank reported a whopping loss for the last three months of 2019 and for the full year as it cut staff and wrote down the value of assets, affirming its status as one of Europe’s most troubled big lenders.

The bank said it lost 1.5 billion euros, or $1.6 billion, in the last three months of 2019, bringing the total loss for the year to 5.3 billion euros. In 2018 the bank effectively broke even for the year and in the fourth quarter.

The Frankfurt-based bank, once Europe’s largest by assets, is in the midst of a desperate attempt to recover from years of scandal and mismanagement that has caused its share price to plummet more than 90 percent since 2007.

Among other things, the bank absorbed severance payments as it eliminated more than 4,000 jobs, bringing the total number of employees to 88,000. The bank also recorded losses as it acknowledged that some assets had lost value.

“Our new strategy is gaining traction,” Christian Sewing, the bank’s chief executive, said in a statement. “We’re very confident we can finance our transformation with our own resources and return to growth.”

Mr. Sewing said the company is 70 percent through a restructuring program that, though costly in the short term, would deliver consistent profits.

“I stand in front of you in a very optimistic frame of mind,” he said at a news conference in Frankfurt. “We have taken a series of landmark decisions and made good progress with the most radical transformation of Deutsche Bank for two decades.”

Until Mr. Sewing, an expert in risk management, took over in 2018, Deutsche Bank was led by investment bankers reluctant to make drastic changes to the company’s aggressive moneymaking strategies. Since then, the bank has scaled back its ambitions.

Ever since it acquired Wall Street’s Bankers Trust in 1999, Deutsche Bank aspired to be in a league with American megabanks like Goldman Sachs and JPMorgan Chase. But it did so by taking chances, including issuing hundreds of billions of dollars in high-risk derivatives. It lent money to Donald Trump’s organization when other banks wouldn’t.

The 2008 financial crisis exposed a series of wrongdoings, including rigged interest rates, laundered money and violations of United States sanctions against countries like Iran. The scandals damaged Deutsche Bank’s reputation and led to billions of dollars in fines. Regulators anxious to avoid more financial crises forced Deutsche Bank and other lenders to take fewer risks.

The bank, which once symbolized German economic prowess, is now focusing on less glamorous and less hazardous businesses like helping German exporters manage financial transactions abroad. Deutsche Bank is in the process of closing or shrinking operations that sell stocks and bonds, and is has quarantined more than $300 billion in risky assets in a separate unit.

Other big European banks, like UBS of Switzerland and Barclays in Britain, scaled back their operations after the 2008 financial crisis, but Deutsche Bank clung to investment banking even as it continued to generate billions of euros in losses.

On Thursday, the company’s shares were trading about 1 percent higher.


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