Deutsche Bank's chief executive John Cryan has urged investors to bear with him as he expects the overhaul of Germany's biggest lender to peak this year, following a record loss in 2015.
"We know that periods of restructuring can be challenging," Cryan said today, as Deutsche reported fourth-quarter earnings including a €1.2 billion loss in its investment bank hurt by legal costs and weak bond trading.
Some large investors showed their patience was beginning to thin after Deutsche flagged the loss last week, sending its shares lower.
Cryan today acknowledged that restructuring was hurting employee morale but said he was confident that remaining disciplined on the bank's strategy would deliver results.
"We can and will transform Deutsche Bank into a stronger, more efficient and better-run institution," he said.
Restructuring and severance charges will reach about €1 billion in 2016 and litigation costs are to stay high, albeit below the €5.2 billion it spent in 2015, the bank said, adding that savings would help keep costs flat.
In the fourth quarter, revenue at the investment bank fell by 30%, with equities trading as well as advisory activities contributing to the slowdown.
Deutsche's retail banking activities fell to a quarterly loss, mainly on restructuring costs.
Like other investment banks, Deutsche Bank is struggling with near-zero interest rates, a slump in oil prices and investor caution due to worries about slowing growth in China.
But analysts have said Deutsche's revenue performance appeared weaker than that of its US peers.
Deutsche Bank's final results showed a full-year loss of €6.8 billion and a fourth-quarter loss of €2.1 billion, mainly due to writedowns, litigation charges and restructuring costs.
By contrast, lower costs helped peers such as Citi, Bank of America, JPMorgan and Morgan Stanley report higher fourth-quarter profits.
Deutsche Bank staff are also bracing for pay cuts as bonus pots for individual divisions are being cut by at least 25-30%, people familiar with the matter said this week.
In October, Deutsche announced a restructuring of its business, splitting its investment bank in two and parting ways with some of its top bankers.
Its share price has fallen by nearly 37% since Cryan took the helm on July 1, promising simultaneously to overhaul Deutsche to meet tighter banking rules and to end costly litigation from past scandals.
