Deutsche Bank Profits Fall 98% To €20m

Troubled Deutsche Bank has reported a 98% plunge in second quarter net profit to just €20m (£16.7m) - blaming a slew of problems for its performance.

The result, Deutsche said, reflected a "weak" business environment and the effects of restructuring - instigated by chief executive John Cryan, who took the role a year ago.

The bank said a 20% decline in net revenues to €7.4bn was down to the low interest rate environment across Europe and uncertainty over the UK's Brexit referendum.

Revenues at its brokerage division slumped by 28% while its investment banking and wealth management arms also endured double-digit declines.

Deutsche added that it booked an extra €259m charge to increase its provision for credit losses. It (Other OTC: ITGL - news) said it was also expecting further litigation costs over historical issues.

The bank has been battling to convince markets and regulators it is on course for recovery ahead of the publication of EU bank stress tests this week.

It was described by the International Monetary Fund last month as a "major systemic risk" - inflicting huge damage on its share price.

Mr Cryan signalled on Wednesday that more cost-cutting would have to be implemented - on top of the measures he has previously announced which have led to thousands of jobs being shed, asset sales and dividends being frozen.

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

"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."

Shares (Berlin: DI6.BE - news) in the bank, which employs 8,000 people in London, fell by more than 2% in the first minutes of trading on the Frankfurt stock exchange.

It meant the bank's market value was 45% down in the year to date.