FRANKFURT, Germany (AP) – Deutsche Bank says it lost 1.89 billion euros ($2.02 billion) in the fourth quarter as losses on the sale of its Abbey Life unit and costs for legal fines and penalties weighed on the bottom line.
The bank strengthened an important measure of its financial solidity and CEO John Cryan said he was optimistic about the coming year.
The fourth-quarter loss was even larger than the 2.12 billion euro loss from the year-ago quarter. Earnings were hit by the disposal of Abbey Life, which led to financial charges of 1 billion euros and costs for fines and penalties of 1.6 billion euros.
Still, the bank saw its core capital ratio – a key regulatory measure of its capital buffers against unexpected losses on investments – rise to 11.9 percent from 11.1 percent at the end of the third quarter. The bank has successfully wound up its non-core operations unit, where it had put assets that it sought to get rid of.
Deutsche Bank’s earnings have suffered as it sheds riskier activities and assets to meet tougher regulation in the wake of the financial crisis, and as it struggles to put legal and regulatory issues related to past misconduct. The bank this month agreed to pay $7.2 billion to U.S. authorities over its sale of securities based on mortgages blamed for helping start the financial crisis. It has also announced job cuts and withdrawal from some less important markets.