Deutsche Bank suffered a net loss of €1.9 billion in 2016, as litigation charges during the year harmed profits and revenues throughout the business.
Full year revenues were down 10% from the year prior at €30 billion, due to a challenging market environment, persistent low interest rates and strategy execution, Deutsche Bank said.
The global markets and trading business was hindered by the bank’s recent settlement with the Department of Justice, as well as various other settlements and fines issued to the bank throughout the year.
Deutsche Bank agreed to pay a monetary penalty of $3.1 billion and provide $4.1 billion in consumer relief in 2016 for selling toxic mortgage loans between 2005 and 2007.
Just this week, Deutsche Bank was fined a total of $630 million by the New York State Department of Financial Services and the Financial Conduct Authority.
Both authorities found the bank had engaged in a long-term ‘mirror-trading’ scheme on the equities desk at its Moscow branch in Russia.
Although, chief executive officer, John Cryan, explained by the end of the year, deposits were much higher than at the beginning of the year.
“Most critically, since we announced the settlement in principle with the Department of Justice in December, we have seen meaningful reengagement by those clients who had pulled back in the autumn,” he said.
Deutsche Bank also said “less favourable market conditions particularly in equities, Deutsche Bank-idiosyncratic challenges mainly in the fourth quarter and the decision to give up revenues as part of Strategy 2020,” were influential in the decline of trading sales.
Cryan concluded: “Despite this loss, the year 2016 was not a bad one for Deutsche Bank.”
“All of the legal matters have heavily impacted the reputation of our bank and made our work more difficult. We are absolutely determined to do everything we can to prevent a repetition of such incidents,” he added.