from Zero Hedge:
We suppose this shouldn’t come as a surprise to anyone since it emanates from the CEO of what could turn out to be the next Lehman, but the market isn’t so pleased with Deutsche Bank’s John Cryan, who on Wednesday delivered the latest bad news for the German behemoth when the CEO said the bank likely would not be profitable in 2016.
Back in January, Deutsche Bank reported what were variously described as “horrible,” “grim” results.
The net loss for 2015 came in at roughly $7 billion, the first annual loss since the crisis. The abysmal year was capped off by €2.1 billion of red ink in Q4 of which some €1.2 billion was attributable to litigation.
The Q4 breakdown – which came a few days after CEO John Cryan initially reported how bad 2015 truly was – was a nightmare. Revenues plunged 30% in corporate banking and securities where provisions for credit losses jumped from just $9 million in Q4 2014 to $115 million. Citi questioned whether the bank’s investment bank model is in “structural decline.”
We think that the bank is in for another difficult year in that guidance is that ‘2016 peak restructuring year’,” BofA said, adding that “it looks like revenues are under a lot of pressure, yet adjusted costs are guided to be flat with another €1bn of restructuring costs.”
Citi sees an additional €3.6 billion in litigation for 2016.
Cryan – who took the reins from Anshu Jain and Jürgen Fitschen (who is still hanging around) last summer – has cut thousands upon thousands of jobs as part of a desperate attempt to restructure the German behemoth which some say is in very real trouble.
Underscoring that assessment are comments out today from Cryan who spoke at a conference in London.
“We’ve said this year is not going to be a profitable year, we may make a small profit, we may make a small loss, we don’t know,” he stammered.
But then again, maybe he does know, because moments later he said this: “There’s a lot of stuff we have to get done this year, so this year we’re not going to be profitable.”
Right. There’s “a lot of stuff to get done this year,” but making a profit isn’t one of them.
Meanwhile, according to Zeit, the bank is cutting its German branches to about 500.
As for the stock… well, it’s getting crushed:
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