Deutsche Bank expects huge 6.7-bn-euro net loss in 2015

Deutsche Bank expects a fourth-quarter loss of 2.1 billion euros, it said in a statement (AFP Photo/Daniel Roland)

Berlin (AFP) - Germany's largest bank, Deutsche Bank, on Wednesday said it expected an overall loss of 6.7 billion euros ($7.3 billion) for 2015, blamed on litigation costs, write-downs and restructuring charges.

Some of the losses had already been announced earlier in 2015 but the bank reported additional litigation charges of 1.2 billion euros in the fourth quarter.

Overall, it expects a fourth-quarter loss of 2.1 billion euros, weighed down by "challenging market conditions", the lender said in a statement of preliminary earnings.

"The full-year results include previously disclosed impairments taken in the third quarter of 5.8 billion euros of goodwill and intangibles, full-year litigation provisions of approximately 5.2 billion euros and restructuring and severance charges of approximately 1.0 billion euros," it said.

The bank is currently embroiled in some 6,000 law suits over allegations of money laundering and rate manipulation. Last May, it was fined a record $2.5 billion for its involvement in rigging interest rates.

In addition to write-downs totalling 5.8 billion euros due to tougher regulations on capital requirements, Deutsche also took charges on assets such as its almost 20-percent stake in China's Hua Xia Bank, pushing it deeper into the red.

The bank said its planned sale of the stake in the China-based bank is expected to close in the second quarter of 2016.

Last October, Deutsche Bank vowed to take drastic measures after unveiling a record 6.01-billion-euro loss in the third quarter.

Besides not paying dividends in 2015 and 2016, Deutsche said it would cut some 26,000 jobs, around a quarter of the workforce, sell off assets and pull out of 10 countries.

"It's all about executing on our plans to build a better Deutsche Bank... about making Deutsche Bank simpler and more efficient," new co-chief executive John Cryan said at the time.

In Wednesday's statement, Deutsche Bank said it expects to report fourth-trimester revenues of 6.6 billion euros -- compared to 7.8 billion euros a year earlier -- and full-year revenues of 33.5 billion euros, up six percent on the previous year.

The lender also said it was targeting a capital ratio -- a measure of its financial strength -- of roughly 11 percent at the end of the fourth quarter.

The bank will announce full details of the fourth-quarter and annual results on January 28.

Observers say Deutsche Bank is trapped between its international ambitions in the field of investment banking, where it insists it is among the top five in the world, and its traditional high-street banking in Germany.

It suffers from mediocre profitability, faces ferocious competition and increasing regulatory demands.

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