Share prices at troubled Deutsche Bank plunged 7% after the bank announced it is facing a €6.7bn net loss over 2015 due to regulatory charges. The majority of penalty costs are itinerary fines, settling court cases.
Taking in charges of around €2.1bn (£1.61bn, $2.27bn) in the fourth quarter of 2015, the German bank was forced to update shareholders on its financial situation in at the end of the year. This means Deutsche Bank is set to report its first full-year loss since 2008 in its full-year results on 28 January.
Apart from the €1.2bn settlement costs, Deutsche Bank, led by new CEO John Cryan, has reserved €900m in restructuring charges. The lender announced in October it is cutting 35,000 jobs as part of this shake-up.
The job cuts are expected to save the bank about €3.8bn and include axing 9,000 full-time employees, 6,000 external consultants advising the bank and the previously reported 15,000 staff, after the disposal of its Postbank subsidiary.
Overall net revenue guidance is at €33.5bn, according to Deutsche. This represents an increase of 4.7% on 2014's €32bn. However, the lender reported a €1.7bn net income last year, as opposed to the expected severe losses over 2015.
Cryan said in a statement: "These decisions will make Deutsche Bank simpler and more efficient by reducing the number of products and services we offer, deepening our relationships with the most promising clients, and bringing focus to the number of locations in which we operate."
"They will also help us to lower the bank's risk profile by being prepared to resolve existing regulatory and litigation matters as quickly as possible," he added.
Besides dealing with high costs of pre-2008 misconduct, Deutsche Bank is trying to survive in an environment of volatile markets and tougher capital requirements. Especially across Europe, with the new MiFID II, a set of pan-European regulatory rules, banks are struggling to hike profits.
The lender's investment arm is suffering as well, with revenues expected to fall. Analysts have said that investment income is expected to decline for a longer amount of time, and litigation costs are expected to persist for several years as well.