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Deutsche Bank considers more cuts as profits plunge by 98%

Published 27/07/2016

Deutsche Bank's shares were down nearly 5% on the Frankfurt stock exchange
Deutsche Bank's shares were down nearly 5% on the Frankfurt stock exchange

Deutsche Bank could embark on even deeper cuts after booking a 98% fall in profits for the second quarter.

Germany's biggest bank saw net profits nosedive to 20 million euros (£16.8 million), down from 818 million euros (£687 million) in the first quarter.

The Bank said it had come under pressure from ultra-low interest rates across Europe and increased uncertainty caused by Britain's referendum on the EU.

Net revenues slipped by a fifth to 7.4 billion euros (£6.2 billion) over the period, while pre-tax profits tumbled 67% to 408 million euros (£343 million) after it was hit by a string of charges totalling 612 million euros (£514 million).

Shares were down nearly 5% on the Frankfurt stock exchange.

Chief executive John Cryan said: "While our results show that we are undergoing a sustained restructuring, we are satisfied with the progress we are making."

He added: "We have continued to de-risk our balance sheet, to invest in our processes and to modernise our infrastructure. However, if the current weak economic environment persists, we will need to be yet more ambitious in the timing and intensity of our restructuring."

Deutsche Bank has suffered from the rout on financial stocks after the Brexit vote, with its value plummeting 45% this year.

Its share price also took a hit at the end of June when it was branded one of the globe's riskiest banks by the International Monetary Fund.

The Frankfurt-based lender is already in the midst of a turnaround strategy to shore up its financial performance and cut costs, with 3,000 jobs in line for the chop in Germany.

It comes as US banking giant JP Morgan announced a better-than-expected set of results earlier this month.

The American lender saw second-quarter earnings drop to 5.67 billion US dollars (£4.2 billion), down from a profit of 5.78 billion US dollars (£4.3 billion) over the same period last year.

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