Earnings

Deutsche Bank Posts $924M Loss As Restructuring Continues

Deutsche Bank, quarterly losses, restructuring, market expectations, news

Germany’s Deutsche Bank reported a net loss below market expectations amid a restructuring plan that includes about 18,000 layoffs, The Wall Street Journal (WSJ) reported Wednesday (Oct. 30).

The lender reported a net loss of $924 million (832 million euros) for the third quarter of 2019. This is the second quarterly loss for Deutsche Bank, which triggered a 7.9 percent drop in the closing share price. Fixed-income trading declined 13 percent.

Analysts were expecting a loss of $865 million (778 million euros), according to data from Refinitiv, WSJ said. Corporate bank revenue saw a 6 percent increase, including an 8 percent uptick in transaction-banking revenue.

The restructuring has Deutsche Bank leaving equities trading along with other operations that aren’t profitable. Its goal is to focus on long-term strengths.

CEO Christian Sewing told WSJ that “the bank’s transformation is on track,” and ultimately, Deutsche Bank will be leaner and better able to concentrate on servicing its client base. The bank’s core business divisions were all profitable, the bank said.

Last month, Deutsche Bank announced it had acquired a 4.9 percent stake in the German-based FinTech Deposit Solutions.

Deposit Solutions provides open banking technology that allows more than 100 banks across 18 countries to offer their customers products from third-party banks.

Deutsche Bank has had a relationship with Deposit Solutions since 2017 with a savings product called ZinsMarkt. The service allows users to access fixed-term deposit products from third-party banks that pay higher interest.

ZinsMarkt has already processed about $2.2 billion (2 billion euros) in deposits and has over 23 fixed-term deposit products with varying maturities from three banks.

Deutsche Bank joins almost 100 financial institutions from 18 countries using the Deposit Solutions platform. Deposit Solutions expanded into Switzerland earlier this year, its first market outside of Europe. It is also planning a launch in the U.S. in the coming months.

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