For 2Q16, Deutsche Bank (DB) reported earnings of 20 million euros, or about $22.2 million, which is 98% lower YoY (year-over-year), dragged down by weak revenues in trading, investment banking, and other core areas. Analysts surveyed by Bloomberg had forecast a loss of $22 million euros. Shares of the company fell by 3.4% after the earnings release.
Deutsche Bank has been the focus of anxiety and health of the European banking system. CEO John Cryan’s efforts to turnaround the bank are not working out well. In 2015, the company announced its first full year of loss since the 2008 recession, and the bank still has a slew of litigation costs to settle. Cryan has been shrinking risky businesses, cutting down on staff-related costs, and cutting dividend payments to boost capital levels.
Deutsche bank expects 2016 to be a tough year for trading and investment banking-related activities. In a note to shareholders earlier in the year, the company provided grim guidance for 2016 for the entire industry (XLF). Cryan has said the bank might not be profitable in 2016. Further, the worsening economic outlook and a difficult operating environment will likely add to its woes. European banks like Credit Suisse (CS), UBS, and RBS have also been suffering. But Deutsche Bank seems to be in the deepest trouble.
Continue to the next part to find out what impacted Deutsche Bank’s 2Q16 earnings.