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27 Jul, 2016 09:53

Deutsche Bank profits plummet 98%, CEO warns of further cuts

Deutsche Bank profits plummet 98%, CEO warns of further cuts

Germany’s biggest bank posted a net profit of €20 million in the second quarter of the year. This is down from €796 million in the same period in 2015.

Deutsche's share price fell by four percent on Wednesday after the announcement. Analysts’ predictions had varied from more than a billion euro loss to half a billion profit.

Deutsche Bank chief executive John Cryan warned about the possibility of further cuts.

"If the current weak economic environment persists, we will need to be yet more ambitious in the timing and intensity of our restructuring," he said on Wednesday.

Overall, Deutsche Bank’s shares have lost about 44 percent of their market value in 2016. This is partly due to increasing skepticism about the bank’s position in the market and $14 billion in fines.

Revenue is down 20 percent in the three months, partly because of the Brexit vote. The investment bank slid 28 percent. At the same time, revenue from Deutsche’s foreign exchange business was flat, even though there was increased client demand for currencies in the wake of the British decision to leave the EU.

Cryan was given the job of chief executive last year to implement cutbacks at the bank, including reducing dividend payments to shareholders, axing thousands of jobs and selling assets.

Keiser: Deutsche Bank ‘technically insolvent’, running a ‘ponzi scheme’

Deutsche has been trying to reassure investors it can boost its capital levels and pay coupons on some debt securities. However, the bank failed to sell a stake in China’s Huaxia Bank in the second quarter, a crucial deal in its sale of assets.

The bank intends to complete the sale in the second half of the year, adding about 40 basis points to the capital ratio, the company statement said.