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Deutsche Bank Q4 Loss Widens, Core Bank Revenues Up, Backs View; Stock Up

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Deutsche Bank AG (DB) reported Thursday a hefty net loss in its fourth quarter, wider than last year, with weak revenues. Core Bank revenues from ongoing core businesses, however, increased with strong performance of Investment Bank and Asset Management segments, and the company reaffirmed its forecast. Shares of the German banking major were gaining around 3 percent in the morning trading.

Looking ahead, Deutsche Bank reaffirmed its confidence in meeting its target of a Common Equity Tier 1 or CET1 ratio above 12.5 percent at all times during execution of the transformation strategy through 2022.

Further, the bank reaffirmed its confidence in its ability to finance its transformation through existing capital resources.

Christian Sewing, Chief Executive Officer, said, "Our new strategy is gaining traction. Stabilising revenues in the second half of 2019 and our consistent cost discipline both contributed to better operating performance than in 2018. Our client business is developing well, right across the bank."

For the fourth quarter, loss attributable to shareholders was 1.60 billion euros, wider than last year's loss of 507 million euros.

Loss before tax was 1.29 billion euros, compared to loss of 319 million euros a year ago.

The latest quarter loss includes 1.1 billion euros in transformation charges and restructuring and severance expenses.

Core Bank, which excludes the Capital Release Unit, reported loss before tax was 437 million euros.

Total net revenues dropped 4 percent to 5.35 billion euros from prior year's 5.58 billion euros. Core bank revenues were 5.5 billion euros, up 5 percent from last year, or 8 percent adjusted for specific revenue items.

Corporate Bank net revenues declined 5 percent to 1.3 billion euros, and Private Bank net revenues were 2.0 billion euros, down 4 percent. Meanwhile, Investment Bank net revenues were 1.5 billion euros, up 13 percent. Excluding specific revenue items, Investment Bank revenues were up 22 percent. Asset Management net revenues climbed 31 percent to 671 million euros.

The CET1 capital ratio improved to 13.6 percent during the fourth quarter, comfortably meeting recent guidance of above 13 percent for year-end 2019.

In Germany, Deutsche Bank shares were trading at 8.17 euros, up 2.51 percent.

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