FRANKFURT, Germany (AP) — Deutsche Bank says it lost $3.45 billion in the second quarter as it booked heavy charges for its sweeping restructuring that will lead to the loss of 18,000 jobs by 2022.
The German bank said Wednesday that without the charges it would have made a net profit of 231 million euros and that a “substantial portion” of the deductions to earnings for the restructuring were now behind it.
The charges included revaluing deferred tax matters, a lowered outlook for its business plans, and losses on software and service contracts.
The net loss turned out to be bigger than the 2.8 billion euros expected in a profit warning issued July 7. The bank’s battered shares were down 3.9% at 6.86 euros in morning trading in Europe. They were trading above 30 euros per share in mid-2015.
Deutsche Bank has struggled with low profits, high costs, questions about its business model, and fines and settlements with regulators for misconduct. CEO Christian Sewing took over last year with a mandate to cut costs and improve returns to shareholders.
The bank has announced plans to reduce the size of its investment banking business as it pulls back from a decades-long attempt to compete with Wall Street rivals and focuses instead on its German and European business clients. It is closing down its business in sales and trading of equities and focusing on business areas where it is among the leading performers.
The bank said that “the large majority” of the one-time charges did not affect its capital buffers against losses.
Sewing said that the bank had already taken “significant steps” to improve its earnings performance and that “excluding transformation charges the bank would be profitable and in our more stable businesses revenues were flat or growing.”
By DAVID McHUGH AP Business Writer