Deutsche Bank AG
) were in the red at the close of the trading session on
Frankfurt's DAX index on Monday, after the bank reported a net
loss of €965 million ($1.3 billion) in the final quarter of 2013.
The shares fell 5.41% to close at €37.21, indicating investors'
disappointment over the unexpected numbers delivered by Deutsche
The loss stemmed from a 27% slump in revenues from Corporate
Banking & Securities (CB&S) unit, primarily due to a 31%
drop in debt sales and trading revenues. Moreover, litigation
charges of €528 million ($718.6 million) during the quarter
negatively impacted the results.
As the U.S. markets were closed yesterday, the first business day
following its earnings release, the ADRs of Deutsche Bank did not
witness any pressure. But following investors' reaction in its
local markets, the chance of slump is high for the ADRs in
For further details on Deutsche Bank's fourth-quarter 2013
earnings please read:
Deutsche Bank Incurs Q4 Loss
Though Deutsche Bank anticipates 2014 to be a challenging
year, it remains firm on achieving its targets under Strategy
2015+ efforts. In Sep 2012, Deutsche Bank declared a number of
initiatives aimed at increasing its competitiveness. These
include improvement in efficiency, aggressive cost cuts, a
simplified capital structure and a change in the company's
BARCLAY PLC-ADR (BCS): Free Stock Analysis
DEUTSCHE BK AG (DB): Free Stock Analysis
ERSTE GROUP BNK (EBKDY): Get Free Report
GRUPO GALIC ADR (GGAL): Free Stock Analysis
To read this article on Zacks.com click here.
The company contemplates making investments of approximately €4
billion and undertaking other such measures to help achieve full
run-rate annual cost savings of €4.5 billion by 2015.
Further, Deutsche Bank aims to reduce its risk-weighted assets
and continue with its de-risking measures. Notably, risk-weighted
assets decreased 11.5% year over year to €355 billion ($483.1
billion) as of Dec 31, 2013.
Strategy 2015+ efforts are encouraging and we expect such efforts
to help improve its operating efficiency. However, the related
costs could weigh on the profitability. Moreover, given the
stressed operating environment and unexpected legal woes, we do
not expect any significant improvement in earnings in the coming
Deutsche Bank currently carries a Zacks Rank #2 (Buy). Other
foreign banks worth considering include
Erste Group Bank AG
Grupo Financiero Galicia S.A.
). All these banks carry a Zacks Rank #2.