Deutsche Bank to recover $47m in bonuses

Following the announcement of disappointing second-quarter results, a number of Deutsche Bank executives have agreed to forfeit their bonuses

 
Deutsche Bank CEO John Cryan blamed the bank's poor results on a lack of market volatility 

In an unprecedented move, one current and ten former Deutsche Bank executives have agreed to waive around ‎€40m ($47m) in bonuses, according to Reuters. The deal was announced alongside the revelation that Deutsche’s total revenue for the past quarter has been significantly lower than analyst predictions – a disappointing result as the lender approaches the middle of a five-year restructuring programme to aid profitability. The deal includes former CEO Josef Ackermann, who headed the bank in the particularly profitable period leading up to 2012, and his successor Anshu Jain, who stepped down in 2015 amid growing investor pressure concerning the bank’s lacklustre performance.

Deutsche has struggled with low market volatility, and posted a 10 percent drop in total revenue for the past quarter to €6.62bn ($7.75bn)

Deutsche has struggled with low market volatility, and posted a 10 percent drop in total revenue for the past quarter to €6.62bn ($7.75bn), leading the lender to reassess full-year revenue forecasts. Where 2017 was expected to be roughly in line with 2016 revenue, the bank said that after this quarter’s poor performance, it now anticipates a revenue drop. CEO John Cryan blamed revenue losses on a lack of significant events needed to drive speculation and trading, such as the political uncertainty of Brexit in the same period last year. “Revenues were not as universally strong as we would have liked, in large measure because of muted client activity in many of the capital markets,” he said in a statement.

Profits did jump from $20m in the same period last year to $466m, though this was mostly thanks to cost cutting measures, making further increases in this manner unsustainable. What’s more, Deutsche has suffered losses from a string of lawsuits in recent years, including for its involvement in the Libor scandal, selling bad mortgage debt in the run up to the 2008 financial crisis, and more recently Russian money laundering. Ongoing investigations into possible sanctions violations by the bank, relating to the 2014-15 Ukraine crisis, may result in further fines later in the year.