What is shocking about Deutsche Bank’s (NYSE:DB) early release of its fourth-quarter losses isn’t the new round of restructuring and litigation charges. It is the fact it made a loss on normal operations too.
This is a bank that is still in a great deal of trouble. With everything going on around the strategic overhaul fleshed out by new chief executive John Cryan last autumn, the cutbacks in people, products and pay, it is unsurprising that some staff might be struggling to dedicate themselves to making money for the bank.
With the group at a low ebb and two years of hard restructuring grind ahead, Mr. Cryan and his team will have to ensure that distraction and demotivation don’t infect the businesses that will be at the core of the future bank: the European corporate banking and transaction services teams.
All told, the bank will make a net loss of €6.7 billion for 2015—its first full-year loss since 2008. Last May, former chief executive, Anshu Jain, told the bank’s annual shareholder meeting of management’s achievements and his conviction that they were on the right path to deal with the bank’s problems. These losses make that assessment now seem even further from reality than it did at the time.
Like Bill Winters, the new chief executive at Standard Chartered, Mr. Cryan has had mostly bad news for staff and shareholders so far. With these results, Deutsche shares now trade at just 35% of expected 2015 book value—worse than Standard Chartered’s 45%.
The real blow for investors and employees alike is that it is still hard to be sure that Deutsche has reached its darkest hour.