Deutsche Bank posts fourth annual loss in five years after worse-than-expected quarter

Deutsche Bank AG swung to a 5.3 billion euro ($5.8 billion) loss in 2019, highlighting the size of its challenge in making itself leaner and more profitable through a sweeping overhaul.
The German bank DB, +1.15% DBK, +3.52% is struggling to make money in a negative-rates environment and under stiff competition from U.S. peers for investment-banking business.
Last year, after a failed attempt to merge with smaller German rival Commerzbank AG, Deutsche Bank moved to shrink and reorganize its global investment bank–long its dominant revenue engine–and put more emphasis on serving European companies and retail-banking customers. It also set to cut 18,000 jobs by 2022 and slash costs.
Costs associated with the revamp weighed heavily on its results last year. Its annual net loss, compared with a profit of EUR341 million a year earlier, was bigger than an average estimate of EUR4.86 billion, according to a consensus of analysts compiled by the bank.
Annual revenue totaled EUR23.17 billion, down 8% from a year earlier but slightly better than expected.
Deutsche Bank said that excluding the division where it has stashed businesses and positions it is selling or winding down, it reported a pretax profit of EUR543 million in 2019.

For the last three months of 2019, it reported its third consecutive quarterly loss, totaling EUR1.48 billion. Revenue fell 4% from a year earlier to EUR5.35 billion.
In a bright spot, its fixed-income business, considered a core strength of the bank, posted a 31% rise in revenue in the fourth quarter.
In December, the bank said it was making progress in cutting costs, and signaled that it didn’t need to sell shares to fund its overhaul.
Tapping shareholders for more capital has become prohibitive for European banks given the sector’s relatively weak returns for investors. As fears of a capital increase at Deutsche Bank dissipated, its shares have recovered some ground this year.
But big challenges remain, including whether the bank can meet its revenue targets and make money in Germany and Europe, where low interest rates have made the business of lending challenging.
Concerns over profitability have forced the European Central Bank, which supervises Deutsche Bank and other large banks in the region, to encourage mergers to strengthen the system.