Deutsche Bank AG, Germany's biggest bank and the parent of the former Alex. Brown & Sons locally, announced an unexpected fourth-quarter loss yesterday, though its chief executive officer predicted a recovery this year.
For the quarter that ended Dec. 31, Deutsche Bank reported a net loss equivalent to about $113 million. The loss was much less than the $1.08 billion loss posted for the comparable period of 2001, but it was far from the $217.8 million profit analysts had expected.
Chief Executive Officer Josef Ackermann "is delivering the cost cuts, but that isn't enough to offset weak revenue," said Rolf Zartner, a money manager with Deka Investment GmbH in Frankfurt, and one of the bank's largest stockholders.
Fourth-quarter revenue plunged 17 percent to $5.82 billion.
For all of 2002, net income more than doubled to $427.93 million from $180 million in 2001. Earnings per share rose to 69 cents from 29 cents in 2001.
Through its purchase of Bankers Trust Corp. in 1999, Deutsche Bank acquired the remnants of Alex. Brown, which was founded in Baltimore in 1808.
Alex. Brown had been purchased by Bankers Trust in 1997. At that time, 1,500 of Alex. Brown's 2,700 employees were in Baltimore.
The pressure Deutsche Bank has been facing to eradicate costs has led to round after round of job cuts.
Baltimore hasn't been spared. According to the most recent figures available, Deutsche Bank will employ about 800 locally when the last reductions and relocations from previously announced programs are completed.
Ackermann, the bank's CEO since May, said prospects for this year are "much improved." During his brief tenure, the bank has begun cutting 14,500 jobs to cut costs. And to raise money, Ackermann has so far reduced Deutsche Bank's interest in a half-dozen German businesses, and sold three American firms outright - moves that brought the bank $8.5 billion.
Gavin Corr, a money manager with London-based Morley Fund Management, the fund-unit of Aviva PLC, Britain's No. 1 insurer, credited management with "a reasonably credible job."
"They are taking aggressive action and Deutsche Bank has a very attractive valuation. The outlook for 2003 is moderately encouraging.
"I'm pretty encouraged that all the bad news is in the [stock] price."
Deutsche Bank's U.S. shares dropped $1.40 each, or 3 percent, to close at $40.65 yesterday.
Bloomberg News contributed to this article.