A year of reorganization has left its mark on Germany’s leading financial institution. Deutsche Bank revealed this week it suffered significant losses in the last quarter and all of 2019. The banking giant claims that the damage is “entirely driven by transformation-related effects” such as compensation for sacked employees and devalued assets.
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New Strategy is Gaining Traction, CEO Says
In a report published Thursday, Deutsche Bank announced a pre-tax loss of €2.6 billion (over $2.85 billion) and explained it had to absorb transformation charges of €1.1 billion, goodwill impairments of €1 billion as well as restructuring and severance expenses of €805 million. The bank’s net loss for 2019 amounts to the staggering €5.3 billion (almost $5.85 billion). The figure includes transformation-related deferred tax asset valuation adjustments of €2.8 billion.
In Q4, Deutsche Bank had a pre-tax loss of €1.3 billion, including transformation charges of €608 million and another €473 million in restructuring expenses. The net loss of €1.5 billion incorporates deferred tax asset valuation adjustments of approximately €400 million. According to the report, the transformation-related effects were largely in line with the expectations. Last year, the bank incurred 70% of the total costs to achieve the goals of the reorganization program which was launched in July and will continue through 2022. Deutsche Bank CEO Christian Sewing stated:
Our new strategy is gaining traction. Stabilizing revenues in the second half of 2019 and our consistent cost discipline both contributed to better operating performance than in 2018. Our client business is developing well, right across the bank.
The chief executive insisted the bank has a strong capital position and expressed confidence that it is
