Deutsche Bank has scrapped board bonuses this year after posting a record loss for 2015, with chief executive John Cryan urging investors to be patient with his revamp of Germany's largest lender.
"We all know that restructuring can be very challenging. It takes time, resolve and patience," Cryan said as Deutsche reported fourth-quarter earnings on Thursday. They included a €1.2 billion ($1.9 billion) loss in its investment bank, hit by legal costs and weak bond trading.
Cryan acknowledged that the bank had lost ground in equities and pledged to invest in its research and sales units to recover market share.
The bank's supervisory board had decided Wednesday that the executive board will not receive any bonus for 2015, he said.
Deutsche Bank shares hit a seven-year low after the lender flagged the loss last week, adding to a near 40 per cent drop in the share price since Cryan took the helm in July.
"The further writeoffs announced raise the issue of capital again," the head of European equities at a fund firm which sold out of Deutsche Bank shares in late 2015 said, without wishing to be identified.
Cryan stressed that at this stage, Deutsche Bank is not planning to increase its capital.
Restructuring was hurting employee morale, he said, but he was confident that sticking to the bank's strategy would deliver results.
"We can and will transform Deutsche Bank into a stronger, more efficient and better-run institution," he told the bank's annual press conference. "It does not happen overnight."
Restructuring and severance charges will reach about €1 billion in 2016 and litigation costs will stay high, albeit below the €5.2 billion it spent in 2015, the bank said. Savings would help keep adjusted costs flat and no further writedowns are to be expected, it said.
Like other investment banks, Deutsche Bank struggled 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 ($10.5 billion) and a fourth-quarter loss of €2.1 billion euros, mainly because of write-downs, 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.
"It's hard to stand up and smile a lot," Cryan said. "Not every day is easy but we can see light at the end of the tunnel."
In the fourth quarter, revenue at the investment bank fell by 30 per cent, with equities trading as well as advisory activities contributing to the slowdown.
"I recognise that in the fourth quarter we lost some momentum in sales and trading," Cryan said.
"I am not so concerned about debt sales and trading where we are choosing to exit some capital intensive businesses," he said, but added: "We do believe we have lost some ground in equities."
Deutsche's retail banking activities fell to a quarterly loss, mainly on restructuring costs.
In October, the bank announced a restructuring of its business, splitting its investment bank in two and parting ways with some of its top bankers.
The bank's staff are bracing for pay cuts as bonus pots for individual divisions are being cut by at least 25 to 30 per cent, people familiar with the matter said this week.
While Deutsche has pulled back from a number of countries, the lender remains committed to grow its business in Asia, co-CEO Juergen Fitschen said, adding that revenues grew by 14 per cent in the region last year, while earnings tripled over the last three years.
On taking the helm on July 1, Cryan promised simultaneously to overhaul Deutsche to meet tighter banking rules and to end costly litigation from past scandals.