FRANKFURT â€" Deutsche Bank, Germany’s largest bank, said it lost nearly 1 billion euros in the fourth quarter of 2013, more than expected, and warned of a difficult year ahead after revenue from investment banking declined and the bank absorbed further costs from legal problems.
“We expect 2014 to be a year of further challenges,†Anshu Jain and Jürgen Fitschen, co-chief executives of Deutsche Bank, said in a statement Sunday night. Despite the loss equivalent to $1.35 billion, the bank still expected to achieve targets it set for 2015, they said.
Deutsche Bank shares had fallen 4 percent by midday, pulling other banking stocks down with them. Barclays was 3.6 percent lowerwhile HSBC fell 4 percent on the London Stock Exchange.
Releasing earnings ahead of schedule, the bank said that net loss in the quarter was €965 million after revenue declined 16 percent to €6.6 billion, largely because of a slump in bond and currency trading. The loss was narrower than the €2.5 billion loss Deutsche Bank reported in the fourth quarter of 2012, but more than analysts had forecast.
Like rivals including JPMorgan Chase, Deutsche Bank faces lawsuits and official investigations stemming from charges of misconduct, primarily in the years leading up to the financial crisis. The bank booked a €528 million loss during the quarter for litigation costs, bringing the total for the year to €2.45 billion.
But Deutsche Bank also seems to be having more trouble than its peers in the United States maintaining revenue and profit. Deutsche Bank suffered a 31 percent drop in sales from bond trading and other fixed income securities, compared with an 8 percent drop for American banks, said Jon Peace, an analyst at Nomura, in a note to clients on Monday. The prospect of higher interest rates, as well as strong performance by stocks, prompted many investors to reduce their bond holdings.
The bank said its loss before taxes in the fourth quarter was €1.15 billion, down from a loss of €3.17 billion in the same period a year earlier. For the full year, Deutsche Bank reported a profit of €1.1 billion, up from €315 million in 2012.
Deutsch Bank agreed to pay $1.9 billion in December to settle claims that it had defrauded two government-controlled companies in the sale of mortgage-backed securities before the 2008 financial crisis. In addition, the European Union antitrust authorities fined the bank €725 million for its role in helping to rig benchmark interest rates.
An earlier version of this article described Deutsche Bank’s earnings incorrectly. The bank had a net loss, not a net profit. The article also omitted the name of Jürgen Fitschen, co-chief executive of Deutsche Bank, in a quote attributed to Anshu Jain, co-chief executive. It was a joint statement.
