Deutsche Bank is Nearing the End of Litigation Woes, CEO Tells Investors
Deutsche Bank (DB) - Get Report , Germany's largest lender, expects to close some of the major legal cases this year that have pushed litigation expenses into the billions of dollars.
"We are gradually approaching the home straight," chief executive John Cryan said Thursday in a speech at the company's annual shareholder meeting. Cyran, who had served as co-CEO with Jürgen Fitschen since 2012, will hold the office by himself as Fitschen moves to a different position, the bank said.
The bank, which has set aside 5.4 billion euros ($6.05 billion) to "settle pending litigation" this year, highlighted improvements in its information technology systems and implementation of better controls to assist with data inquiries from regulators.
"Litigation expenses of this magnitude are completely unacceptable," Cryan added. "We have to learn the lessons from the past. And this we have already been doing intensively and will continue to do so."
The bank spent 5.2 billion euros on legal costs in 2015, paying a 2.2 billion-euro settlement for claims that it helped to manipulate benchmark interest rates including the Libor, or London Interbank Overnight Rate, a global standard for products including mortgages and student loans. The lender is involved in roughly 7,800 different legal cases, according to the Wall Street Journal.
Deutsche Bank posted a loss of 6.8 billion euros last year, but Cryan reassured investors that it would become "leaner and simpler," take on less risk, and improve its capital base. He also highlighted that because of global market volatility, it will withdraw from a "number of markets."
"We aim to concentrate our efforts on around a third of our clients, who already produce 98% of our revenues today," he added.
Shares of the lender rose 0.36% to $16.81 following the meeting.
The stock has taken a beating this year, falling more than 30% after revenue and profit plummeted amid market volatility and declines in securities trading revenue. Other European banks have taken a hit, too: The SX7E, Euro Stoxx' European banking sector index, has tumbled 21.2%.
Still, Cryan remains optimistic.
"Every day, we can become better," he told investors. "This is measurable. We will measure it, and you will be able to measure how well we perform.."
