Deutsche Bank warns: more cost-cutting after reporting profit plunge

Deutsche Bank, Germany's biggest bank, posted a 98-per-cent plunge in second quarter profit on Wednesday, with the group's chief executive John Cryan warning that the company might now have to step up its cost-cutting and restructuring.

The bank said net profit in the three months to the end of June slumped to 20 million euros (22 million dollars) compared with 798 million euros in the same period last year, after Britain's decision to leave the European Union hit revenue from global market trading.

The results were in line with analysts' forecasts.

"We have continued to de-risk our balance sheet, to invest in our processes and to modernize our infrastructure," said Cyran.

"However, if the current weak economic environment persists, we will need to be yet more ambitious in the timing and intensity of our restructuring," said the Deutsche chief.

Cyran is at present rolling out a major restructuring involving withdrawing from 10 foreign markets, closing 188 branches across Germany and slashing about 3,000 full-time jobs in the nation.

The bank wants to cut its global workforce by 9,000 during the next two years.

Deutsche stumbled into a full-year loss of 6.8 billion euros last year as it battled to contain costs and meet hefty legal bills around the world.

Revenue was down 20 per cent at 7.4 billion euro in the three months that ended in June, Deutsche said.

This was despite a 28-per-cent fall in revenue from the bank's global market operations, which was partly a result of financial market turbulence triggered by Britain's decision to leave the EU.

However, shares in the group slumped 4.6 per cent in late morning trading on the Frankfurt Stock Market. The bank's stock is now down more than 45 per cent since the start of the year.

Deutsche is one of nine German banks participating in bank stress tests being conducted in 15 European nations by the European Banking Authority.

The EBA is set to release the results on Friday, after US markets close.

Last update: Wed, 27/07/2016 - 15:00

More from Business

Financial leaders in Davos optimistic about US, but see trade risk

The US economy will likely profit from the planned policies of its new president, as long as Donald Trump does not...

Facebook to build data centre in Denmark

The Danish city of Odense and social media giant Facebook announced on Thursday the city was to host a new European...

Freight train from China crosses 12,000 kilometres to London

The first Britain-bound freight train from China arrived in London on Wednesday, completing an 18-day trip across...

US prosecutors finalize 7.2-bln-dollar settlement with Deutsche Bank

The US Justice Department announced a 7.2-billion-dollar settlement Tuesday with Deutsche Bank over allegations that...

General Motors announces 1-billion-dollar investment in US workforce

General Motors will join other carmakers in opting to invest and hire inside the United States, the company...