Thursday, January 21, 2016

German Bank: More than six billion loss – share crashes – THE WORLD

German Bank CEO John Cryan swears the employees of the Dax Group after a record loss in 2015 even more difficult times on. In the next two years would on the Bank “hard work and loads” to Cryan wrote to the employees. However, the radical restructuring of the Group was no alternative.

Cryans first annual balance is deep red. The bank expects according to preliminary figures from the Wednesday night at around 6.7 billion euros the largest annual loss in its history. Germany’s biggest money house collapses thus from deeper fears than internally and by analysts. On the market had expected a decline of slightly more than five billion euros

For 2014, the institute had identified around 1.7 billion euro profit. – more than twice as much as a year earlier. Details on the balance sheet in 2015 intends to present on 28 January the Bank. The preliminary figures were in the stock market is not good at: The share price fell further, on Thursday morning saw a decline of six percent

billion dollar depreciation

The first annual loss since the 2008 financial crisis (around EUR 3.9 billion) was indeed “sobering,” Cryan admitted. It go but about making the Bank “simple and efficient” to reduce risks and “conclude litigation as soon as possible,” affirmed the Briton. “By taking these steps we create the potential to develop into a strong, well-run institution and efficient.” Cryan had replaced on July 1, Anshu Jain as Co-Chief and will assume sole Managing Board in May 2016, following the Annual General Meeting.

Expensive litigation, depreciation and costs for job cuts weigh on the German market leader. Even the end of October had Cryan predicted: “Unless a miracle happens, we will report a loss in 2015″. As the Group had just shocked the third quarter with a record net loss of six billion euros -. Because billionaire depreciation in investment banking and in retail banking

For legal disputes is the in the fourth quarter is expected to cover bank further 1.2 billion euros. “These loads can be changed by further developments until the publication of the final annual financial statements on March 11, 2016 yet,” said Cryan. So far, the DAX company sees 2015 total of 5.2 billion euros of provisions for legal disputes before.

workforce shrinks by a quarter

Another billion is for the planned job cuts added: In-house to the bottom line 9000 jobs are deleted, 4,000 of them in Germany. Including the separation adopted by Postbank shrinks the workforce of 100,000 employees last well by about a quarter. By the end of 2017, the German bank 200 of 700 own stores will close.

The cost of realignment and severance payments burden earnings in the fourth quarter with approximately 800 million Euro – especially in retail banking. Because the software is out of date, the bank also writes in the range an additional 100 million euros.

In Investment Banking the Institute make to create the ever more stringent capital requirements, many shops just in volatile capital market business is no longer worthwhile. In the fourth quarter mainly of trading securities was not around, so that revenue declined to 6.6 billion euros – or about 15 percent less than a year earlier

Along with the extraordinary costs, this leads to the end of the year again to a quarterly loss. This amounts to around 2.7 billion euros before tax and around € 2.1 billion below the bar. A year earlier, the bank had achieved 441 million euro profit.

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