Frankfurt: Deutsche Bank AG, Germany’s biggest bank, said Thursday that one-off effects pushed it into the red in the fourth quarter of last year and led to a sharp drop in full-year profits.
Deutsche Bank said in a statement it ran up a loss of €2.167 billion ($2.9 billion) in the period from October to December, compared with a profit of €147 million a year earlier.
At a pre-tax level, too, earnings were deeply in the red to the tune of €2.569 billion in the October-December period compared with a year-earlier loss of €351 million.
The bottom-line loss was attributable to writedowns of €1.9 billion and litigation-related charges of €1.0 billion, the statement explained.
At the same time, fourth-quarter revenues grew by 14% to €7.9 billion, Deutsche Bank said.
Deutsche Bank is currently being investigated over allegations that some of its employees were involved in rigging the Libor and Euribor interest rates.
And one of its co-chief executives, Juergen Fitschen, is among a number of top-ranking managers under suspicion of being privy to a scheme to avoid paying sales tax in the trading of carbon emissions certificates.
The fourth-quarter loss also dragged down Deutsche Bank’s bottom line for the whole of 2012, when net profit declined to €611 million from €4.132 billion the year before, the bank said.
At a pre-tax level, full-year profit slumped to €1.397 billion in 2012 from €5.39 billion in 2011.
Nevertheless, Deutsche Bank said it would pay shareholders an unchanged dividend of €0.75 per share.
In September, the group unveiled deep cost-cutting plans which included a decisive shake-out of risky assets.
While several of the measures “had an expected material impact on our fourth quarter financial results, we are encouraged by the initial results,” insisted Fitschen and his co-CEO Anshu Jain.
For example, Deutsche Bank’s key core tier one capital ratio—a measure of a bank’s ability to withstand unforseen risks—rose to 8.0%, from less than 6.0% a year earlier and “significantly above our communicated target of 7.2% for year-end 2012”.
“This development predominantly reflects strong delivery on portfolio optimization and de-risking of non-core activities, as well as model and process enhancements,” the two CEOs said.