FRANKFURT – Deutsche Bank, Germany’s largest lender, reported a surprise net loss of 2.2 billion euros ($3 billion) for the fourth quarter of 2012 on Thursday, hurt by the diminished value of some assets as well as costs related to numerous legal proceedings.
The results underline the task ahead for Jürgen Fitschen and Anshu Jain, the co- chief executives who took over the bank less than seven months ago and have declared their intention to deal more severely with the legacy of the financial crisis.
“This is the most comprehensive reconfiguration of Deutsche Bank in recent times,” Mr. Fitschen and Mr. Jain said in a statement. They warned that “deliberate but sometimes uncomfortable change” lay ahead, adding that “this journey will take years not months.”
Deutsche Bank avoided a government bailout during the financial crisis, but has faced numerous lawsuits and official investigations, including a tax-evasion inquiry that led to a raid on company headquarters last month by German police.
“Significant” charges related to legal proceedings contributed to the loss, Deutsche Bank said, without providing specifics.
Analysts consider the bank to be among the most highly leveraged in Europe, and bank management has promised to reduce the number of risky activities, a process that sometimes requires it to recognize the reduced value of assets and book losses.
Despite the loss, Deutsche Bank said fourth-quarter revenue rose 14 percent, to 7.9 billion euros, from the period a year earlier. The bank also said it had increased the amount of capital held as insurance against risk, and reduced the amount of money it needed to set aside to cover possible bad loans. The bank said it had reduced total employee pay to the lowest level in years.
The bank had warned in December that it would incur major charges in the quarter, without saying how much.
DealBook: Deutsche Bank Posts Surprise $3 Billion Loss
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DealBook: Deutsche Bank Posts Surprise $3 Billion Loss
