Deutsche Bank tumbles after announcing €6.7bn full year loss

Deutsche Bank slid after it warned that it expects to incur a loss of around €6.7bn (£5.2bn) for 2015 due litigation charges, restructuring costs and “challenging” market conditions.

In an unscheduled announcement late on Wednesday, the bank said it will likely incur litigation charges of around €1.2bn, restructuring and severance charges of €800m related to the private & business clients segment, and a €1m charge for the impairment of software.

Deutsche expects to report full year 2015 revenues of €33.5bn and as a result of the charges outlined above, a loss before income taxes of around €6.1bn and a net loss of approximately €6.7bn. This compares with a profit of €1.69bn the previous year and will be the bank’s first yearly loss since 2008.

Meanwhile, it posted a fourth quarter loss of €2.1bn compared with a net profit of €441m the previous year.

In pre-tax terms fourth quarter earnings fell to -€2.7bn (UBS: -€500m). Revenues also missed the Swiss bank's estimate of €7.8bn.

"We think FX and Rates could have been decent but not able to compensate challenging revs in Credit, HY, lev lending, emerging markets," UBS analyst Daniele Brupbacher said in a research note sent to clients.

Credit Suisse, which rates the stock at ‘neutral’, said “the announcement is a reminder of the challenges in terms of P&L the bank is facing over the next 18-24 months, with poor revenue outlook, significant execution risk and uncertainty on the quantum of one-off charges resulting in TNAV/regulatory capital volatility”.

At 0945 GMT, Deutsche shares were down 8.6% to €16.19.