2016A statue is seen next to the logo of Germany’s Deutsche Bank in Frankfurt, Germany.
Kai Pfaffenbach | Reuters
Deutsche Bank on Thursday posted a full-year net loss of 5.3 billion euros ($5.8 billion) amid a huge transformation project, the cost of which the German lender said is now 70% complete.
Analysts had expected a 5.1 billion euro loss for the year, according to a Reuters poll, while the fourth-quarter net loss came in at 1.5 billion euros against expectations of 1 billion euros.
The German lender announced in July that it would pull out of its global equities sales and trading operations, scale back its investment banking division and cut 18,000 jobs in a bid to trim its adjusted cost base by 20% by 2022.
The bank’s common equity tier 1 (CET1) ratio came in at 13.6%, unchanged from the fourth quarter of 2018 and up from 13.4% in the previous quarter, with Deutsche citing “ahead-of-target risk weighted asset reduction by the Capital Release Unit.”
In its earnings report Thursday morning, Deutsche Bank said the full-year net loss was “entirely driven by transformation-related effects.”
The bank attributed a 2.6 billion pre-tax loss to the absorption of transformation charges of 1.1 billion euros, goodwill impairments of 1.0 billion euros and restructuring and severance expenses of 805 million euros. The full-year loss additionally included transformation-related deferred tax asset valuation adjustments of 2.8 billion euros.
Deutsche said it had “recognized 70%” of the anticipated cumulative costs to achieve its transformation strategy between 2019 and 2022.
Deutsche Bank on Thursday posted a full-year net loss of 5.3 billion euros for 2019, missing market expectations as a major restructuring program continues to weigh on earnings.