Deutsche Bank bonuses balloon to €2.2bn despite further losses

BONUSES for staff at Deutsche Bank have more than quadrupled to €2.2bn (£1.9bn), despite the banking giant racking up its third consecutive loss for 2017.

The German lender, which employs more than 8,000 people in the UK, also posted a larger after-tax loss than it had previously disclosed, at €735m. It had said in February it had lost €497m.

Deutsche Bank would none the less have returned to the black in 2017 were it not for a one-off €1.4bn charge arising from president Donald Trump’s US tax reforms that forced it to reassess its deferred tax assets.

It defended the bigger bonus pool, saying it was right to reward staff after a straitened prior year when it paid €500m of bonuses.

But the hike, which had already been trailed in the German press, has caused controversy. Martin Schulz, former leader of Germany’s Social Democratic Party, had said the plan “hurts our solidarity” between business and citizens. In its annual report Deutsche Bank described a “hard” Brexit as the “greatest near-term risk” to eurozone economies, adding that it expected to incur higher costs this year related to the UK’S withdrawal from the EU.

However, the lender said it expected banks across the Continent to continue to grow in 2018, buoyed by strengthening global growth.

Deutsche Bank’s 12-strong management board, including chief executive John Cryan, waived their bonuses for 2017. But their collective total pay still rose 13pc to €29.2m.

Mr Cryan took a pay cut of €400,000, earning €3.4m last year. The Deutsche boss is under intense pressure to turn the bank around after years of the lender underperforming its US peers.

Mr Cryan told reporters in February that 2017’s more generous bonuses were a necessary “one-off investment” to retain staff. He added: “In the coming years, these kind of bonus payments will only be justified if the bank performs correspondingly”.

The British-born chief told investors he would put the bank “back on the front foot” last March, alongside a major restructuring plan and an €800m capital raise from investors.

But in its 2017 results, revenues slipped 12pc to €26.4bn, and hit its lowest level in seven years in the fourth quarter, dropping 19pc on the prior year to €5.7bn.

In its annual report Deutsche Bank said it had suffered a hit from delays on disposals of some unwanted businesses and in realising savings from its merger of its retail banking arm with fellow German lender Postbank.