Newspaper article International New York Times

Deutsche Bank Leaders to Share the Pain ; Management Will Forgo Bonuses after German Lender Reports Record Loss

Newspaper article International New York Times

Deutsche Bank Leaders to Share the Pain ; Management Will Forgo Bonuses after German Lender Reports Record Loss

Article excerpt

Germany's biggest bank affirmed the $7.4 billion full-year loss it had previewed last week, and said that its management and shareholders would share the pain.

Deutsche Bank, confirming that it would post a record loss for last year, said on Thursday that members of its management board would not receive bonuses for the year and that shareholders should not expect a dividend until 2017 at the earliest.

The giant German bank reported a loss of 6.8 billion euros, or $7.4 billion, in 2015, as it set aside money to cover lawsuits and official investigations, and it suffered a decline in revenue in its investment banking unit.

The numbers essentially tally the business damage for Deutsche Bank, which has been distracted by a long list of accusations of wrongdoing in financial markets and has been buffeted by management upheaval.

In a news conference on Thursday, the bank's co-chief executive, John Cryan, said that the bank's general bonus pool would be smaller "as a matter of justice" to reflect the impact of the provisions the bank took last year, particularly for the legal cases.

"By and large, I think we are underpaying against our international peer group this year, and I hope that many staff understand why," he said. "The bonus pool this year will be down by a fair amount on the previous year. I think that's right."

But he sought to take the blame for Deutsche Bank's financial calamity.

"I feel responsible for basically a EUR 7 billion loss," Mr. Cryan said. "Personally responsible for all of it. It's not someone else's fault."

Mr. Cryan, who took over as co-chief executive in July, has been moving quickly to try to address the bank's legal and organizational problems. The measures have hurt profit, but they could pay off if he succeeds in resolving the litigation issues and making the bank less complex and easier to manage.

Mr. Cryan said he was optimistic that the bank could make "significant inroads" on its outstanding legal matters this year.

The bank has already paid billions in fines and settlements related to accusations that it colluded with other banks to fix benchmark interest rates, and that it violated international sanctions against countries like Iran. …

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