By Zachary Laubernds
Money & Investing Writer
Deutsche Bank (NYSE: DB), the world’s 8 largest bank which posted €31.95 billion in revenue in 2014, has posted record losses for 2015.
The Frankfurt, Germany based investment bank reported a €6.2 billion loss in the 4th quarter of last year.
This loss has very clearly affected the bank’s operations in big ways. The most public effects is the announcement that Deutsche Bank plans to cut of bonuses for its managers.
These losses and the effects resulting from them can be contributed largely to the investigation and legal fees that the world’s 8th largest bank has been forced to pay amid numerous allegations of wrongdoing within the markets.
They also suffered a 30 percent decline in Q4 of 2015. The company said that the losses are from the “challenging trading market.”
These issues were also intensified by the disorder created from the change in management after the allegations of wrongdoing surfaced. In addition to the management losing their bonuses, the general bonus pool was going to be decreased according to Co-Chief Executive John Cryan.
In a press conference on January 28th Cryan said “By and large, I think we are underpaying against our international peer group this year and I hope that many staff understand why,” although Cryan is making it clear that bonuses are being cut for a reason, he also made it clear that he felt responsible for the company’s issues, saying “I feel responsible for basically a €7 billion loss” and “personally responsible for all of it, it’s not someone else’s fault.”
Taking the blame for the corporation’s issues was rather surprising due to the fact that Cryan has only been in his current position since last July.
He has made efforts to address the company’s recent legal issues but those efforts have since been overlooked in the wake of a record loss.
Cryan seems focused on Deutsche Bank’s legal issues though, saying that the company could possibly make “significant inroads” in their legal proceedings this calendar year.
When Cryan became chief executive back in July he made it clear in his introduction that the following months could be rough, and he was right.
The company has already paid out billions of Euros in the past year in legal settlements and fines.
The bank has been accused of several market infraction including collusion with other international banks to fix market rates and infractions in currency trading.
The long list of accusations against Deutsche Bank and the losses incurred from the attempts to rectify those issues have cause Germany’s largest bank to lose more than 50 percent of its stock price in the last year.
These issues that Deutsche is facing are very similar to the issues being experienced by many of the world’s financial intermediaries.
Though most of the world’s banks aren’t dealing with the legal issues that Deutsche Bank is handling but the issues of heavy losses for financial intermediaries have been ravaging the markets for years.
A version of this article appeared in the Tuesday, February 9th print edition.
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