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FRANKFURT (Reuters) – Deutsche Bank (DE:) on Wednesday posted an 832 million euro ($924.35 million) loss in the third quarter due to costs for a major restructuring and as income from its key bond trading division fell sharply.
Germany’s largest lender had flagged it would lose money this year when it announced in July it would axe vast swathes of its trading desks, cutting 18,000 jobs and costing 7.4 billion euros.
It marks the second consecutive quarterly loss as the bank faces costs to reshape its business, and compares with a 3.15 billion euro loss in the second quarter and a 229 million euro net profit a year ago.
Analysts, unsure of the size of restructuring costs the bank was planning to post in the quarter, largely held back on providing estimates in advance of the earnings.
The bank’s shares were indicated to open 3% lower.
Revenue at the bank declined 15% to 5.3 billion euros, falling short of a 5.6 billion euros estimate according to Refinitiv. The bank attributed the decline to its decision to exit its equities business.
Analysts are looking for signs that Deutsche’s exit from some business may have a knock-on effect to other business lines.
Revenue at Deutsche’s cash-cow bond-trading division dropped 13% in the third quarter, underscoring continued weakness at the German lender’s investment bank.
That compares with a 10% rise in the third quarter for U.S. banks, according to Goldman Sachs (NYSE:).
Deutsche, founded in 1870, is considered one of the most important banks for the global financial system, along with JPMorgan Chase (NYSE:), Bank of America (NYSE:) and Citigroup (NYSE:).
But the German lender has faced a stream of losses and scandal, prompting it to embark on one of the biggest overhauls to an investment bank since the aftermath of the financial crisis.
Chief Executive Officer Christian Sewing noted the bank’s four core divisions posted a pre-tax profit. “These quarterly results are just an interim assessment, but they are encouraging,” Sewing wrote to staff.
The initial reaction from some analysts less favorable, however.
“One has to look very hard to find anything positive in Deutsche Bank’s results this quarter,” said Octavio Marenzi, CEO of capital markets management consultancy Opimas.
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