Deutsche Bank posts bigger-than-expected loss amid restructuring

Deutsche Bank reported a bigger-than-expected third-quarter loss on Wednesday as it took a hit from restructuring costs.

The bank made a net loss of €832m compared to a profit of €229m in the third quarter of last year and a €3.15bn loss in the second quarter. Analysts were expecting a loss of €778m loss.

Total net revenues during the period declined 15% from a year ago to €5.3bn, with the drop attributed to DB's decision to exit equities sales and trading. Meanwhile, the bank's Common tier 1 equity ratio was 13.4% versus 14%.

Revenue in the bank's fixed income business fell 13% on the year to €1.23bn.

Deutsche said it had made "significant progress" with its restructuring in line with key targets that were announced in July. This included de-risking, cost reduction and growth in business volumes.

Chief executive officer Christian Sewing said: "Despite having launched the most comprehensive restructuring of our bank in two decades, we delivered profits in our four core businesses during the quarter and grew loans and assets under management.

"Transformation is fully underway with tangible progress on costs and de-risking. A 13.4% CET1 ratio underlines our strength."

Neil Wilson, chief market analyst at Markets.com, said: "The loss is in large part due to restructuring costs that are the necessary evil of trying to get the bank back to profitability. Can it get any wurst?

"Management are comfortable with the figures, largely because they reflect large restructuring costs that they think will not last forever and the core bank posted a pre-tax profit of €352m.

"Restructuring takes time, of course, and may be more expensive than analysts think, but Deutsche has had a decade and several attempts at this already. And the decline in revenues can’t be masked. Bond trading is about all it has left in investment banking and the fixed income division posted a 13% drop in revenues."

At 1020 GMT, the shares were down 5.8% at €6.80.