Deutsche Bank fell further behind its Wall Street rivals in 2016, lagging their strong rebound in bond trading in the last three months of the year. As Sonia Legg reports, the losses at Germany's flagship lender are increasing pressure on CEO John Cryan ahead of an expected strategy update this spring.
It's been under a cloud for months as it pays the price of its many past misdeeds. And Deutsche Bank's fourth quarter results didn't clear them away. Net loss was 1.9 billion euros - worse than the expected 1.16 billion. Despite the CEO's smiles litigation costs are still hampering the German lender's recovery. (SOUNDBITE) (German) CHIEF EXECUTIVE DEUTSCHE BANK, JOHN CRYAN, SAYING: "I do not want to beat about the bush; there were times in 2016 when we were under immense pressure. This was especially true in the autumn, when the US Department of Justice's 14 billion dollar opening demand became public knowledge." At that point there were fears the bank might need a bailout. But the final $7.2 billion settlement offered some relief. There've been more fines since then as the bank deals with past offences, including selling toxic mortgages and sham Russian equities trades. Deutsche's bond trading cash cow has helped - revenues in the division were up by 11 per cent. (SOUNDBITE) (German) JOHN CRYAN, SAYING: "2017 began with a lot of promise. In key areas, our business is operating distinctly better than in the previous year, for example in our capital markets business. We are gaining additional momentum because we are now putting additional litigation matters behind us." But some of Deutsche's Wall Street rivals did far better. And that means the pressure on CEO John Cryan is increasing. Fifteen months after the launch of a major revamp staff numbers were only down 1 per cent. Cryan has vowed to reduce the cost base by a further near three billion euros - slashing bonuses by 11 percent. But new civil lawsuits have emerged and Deutsche's had to hike litigation provisions by more than a third. All eyes are now on another expected strategy update this spring.