European shares are in trouble on Friday as a bad week gets worse.
One particular vexing issue this morning is Deutsche Bank, which disappointed investors again with results that missed even the lowest estimates on the top line as revenue declined for the eighth quarter out the 10 John Cryan has been at the helm. The bank reported its third consecutive annual loss today.
Cryan tried his best to sound an upbeat tone on the call, noting that the “outlook for revenue in 2018 seems improved compared with 2017,” but that doesn’t “seem” to have allayed fears, because the stock is down the most in six months:
Sales and trading revenue in Q4 plunged 27%, which isn’t surprising given the overall operating environment (all banks are struggling on this front), but with Deutsche Bank, people just aren’t in a forgiving mood.
“What must frustrate investors, in the stock in particular, is the lack of positive news,” Axiom Alternative Investments Gildas Surry (who holds Deutsche Bank bonds) told Bloomberg, before underscoring the frustration as follows: “FICC down, financing down, costs up.”
There you go. And the costs bit is particularly distressing given Cryan’s commitment to cost cutting. The bank expects costs to drop by just 4% to €23 billion this year, less than the previous target of €22 billion.
Bottom line: there wasn’t much good here, despite Cryan’s attempts to explain how the “outlook for revenue in 2018 seems improved compared with 2017.”
You’re reminded that this comes at a time when Cryan has reportedly lost the confidence of at least three of the bank’s top 10 stakeholders. Two of those folks who spoke to Bloomberg last year said he needs to deliver by this spring otherwise, well, otherwise it might be time let someone else try to turn the Titanic around.
Today’s report won’t help the beleaguered CEO.