Deutsche Bank to pay unchanged dividend, warns of challenges ahead

29th January 2014, Comments 0 comments

Deutsche Bank, Germany's largest lender, said on Wednesday it will propose paying an unchanged dividend for 2013 as it faces a raft of different challenges this year.

"The executive board has decided to propose to the supervisory board a dividend of 0.75 euros, which corresponds to the previous year's level," chief financial officer Stefan Krause told Deutsche Bank's annual earnings news conference.

Last year, the group chalked up net profit of 1.08 billion euros, compared with 315 million euros a year earlier.

But it disappointed investors by booking a loss of 965 million euros for the fourth quarter alone, as a result of one-off charges, a figure with which management was "not happy," said co-chief executive Anshu Jain.

"Based on our progress, we confidently re-affirm our 2015 aspirations and our financial targets for capital strength, cost efficiency, returns and performance in our core businesses," said the other co-chairman Juergen Fitschen, adding that the bank was "confident" that its strategy for 2015 and beyond was "on track."

As part of the programme, Deutsche Bank is looking to slash costs by 4.5 billion euros per year and targeting a core own funds ratio of more than 10 percent, as well as a downsizing of its balance sheet from 1.1 trillion euros at the end of 2013.

Nevertheless, "in 2013 our core businesses achieved close-to-record levels of operating profitability, and simultaneously we have built a leaner, safer, and better-balanced Deutsche Bank. That's a journey we are committed to continuing," Jain said.

Looking ahead, the two co-chiefs warned that 2014 "will be a year when we continue to settle major outstanding litigation matters.

"We anticipate further costs arising from this, but our goal is to put the majority of the most significant litigations issues behind us as soon as possible".

Investors appeared to be lukewarm about the prospect of an unchanged dividend and Deutsche Bank shares were showing a loss of 0.28 percent on the Frankfurt stock exchange in early afternoon, in a market that was down 0.13 percent.

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© 2014 AFP

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