Earnings yearnings

2 February 2017 By Dominic Elliott

The German lender’s 1.9 bln euro fourth-quarter loss featured weak revenue and souring loans. A big jump in Deutsche Bank’s key balance sheet metric may forestall a cash call. But there is scant proof of a viable business emerging from the debris of restructuring and litigation.

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Deutsche Bank on Feb. 2 reported a worse-than-expected fourth-quarter net loss of 1.9 billion euros ($2 billion). Analyst consensus compiled by the lender had forecast a net loss of 1.6 billion euros.

The German lender's common equity Tier 1 capital as a proportion of risk-weighted assets, a key measure of balance sheet strength, improved by 80 basis points to 11.9 percent in the three months to December.

However, other trends were less positive. Provisions for loan losses in the fourth quarter were up 30 percent year-on-year. In Deutsche's global markets division, fourth-quarter revenue fell 3 percent year-on-year. Fixed income trading revenue rose 11 percent year-on-year, but equities trading revenue was down 23 percent. Excluding one-offs, revenue in Deutsche's private, wealth and commercial clients arm was down 7 percent year-on-year. And in asset management, revenue fell 8 percent year-on-year.

By 0805 GMT, shares in Deutsche were trading at 18.67 euros, down 2.7 percent from the previous day's close.

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