Struggling Deutsche Bank misses estimates as losses exceed €3bn
The scale of troubles at Deutsche Bank were laid bare this morning after the German lender posted worse-than-expected losses over the last quarter.
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Dented by costs from a major business overhaul, the embattled bank reported quarterly losses of €3.15bn (£2.7bn) over the three month period, missing its own previous estimates of €2.8bn and falling from profits of €401m in the previous year.
Deutsche’s share price tumbled three per cent this morning, losing gains that it had made during trading yesterday as investor optimism retreated.
Earlier this month Deutsche’s boss Christian Sewing revealed plans to axe 18,000 jobs across the firm’s global offices, adding today that 900 employees have already been given notice or informed their role will be cut.
Germany’s largest lender is also aiming to shut its loss-making equities business, where revenues over the quarter plummeted 32 per cent, as it calls time on its 20-year attempt to rival Wall Street’s investment banking giants.
Net revenue in the quarter dropped six per cent to €6.2bn, slightly missing analysts estimates of €6.3bn.
Several high-profile financial investigations, botched merger plans with Commerzbank and wider industry headwinds have blighted the group’s performance over the last 12 months, during which the share price has crashed in value by more than a third.
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“The performance of the asset management division was a bright spot, which is encouraging given that’s where management want to focus their attention going forward as part of the new business plan, but that was a silver lining on what was a pretty disappointing set of numbers,” said Michael Hewson, chief market analyst at CMC Markets UK.
Hewson added: “In summary this update had little to cheer about and this morning’s poor European economic data is unlikely to offer much cheer to Deutsche Bank’s senior management given that it makes a prolonged low and even more negative rate environment that much more likely, thus increasing the revenue pressure on a bank that is more exposed than most.”