The German bank blames the losses in the second quarter on radical restructuring.

Deutsche Bank has posted a second quarter net loss of €3.1 billion after strategic transformation charges including impact from lowered outlook on business plans of €3.4 billion. The loss is a result of the restructuring, it said in a release.

In July, Deutsche announced it was transforming its business model to become more profitable, improve shareholder returns and drive long-term growth. To execute its transformation, the bank will significantly downsize its investment bank and aims to cut total costs by a quarter by 2022.

Deutsche Bank was the fourth most active provider by issuance in the second quarter, behind Commerzbank, Vontobel, and Société Générale, according to SRP data. The bank sold 42,300 products – predominately leverage and flow certificates – between April 1 and June 30 2019, up 22% from the 34,600 products in the prior-year period, but down by seven percent compared to the 45,400 products launched during 1Q2019.

The highest sales were achieved in Spain, where it sold five structured products worth a combined €77m, including the highest selling product for the quarter which came in the shape of Nota Multicupón Europa, an eight-year medium-term note linked to the Eurostoxx 50 and Ibex 35, which sold €22.5m during its subscription period.

In its domestic market Germany, where the vast majority of this quarter’s issuance were certificates, listed on the exchanges of Frankfurt and Stuttgart, the bank also sold 68 non-flow products worth an estimated €72m while in Norway 10 products were distributed via SIP Nordic Fondkommission and Norse Securities, respectively.

Other markets were the bank was active where Italy (€62m from seven products), Belgium (€22m from three products), Japan, Sweden and the USA.

The best performing product in the quarter was Dual Index 10:10 Plan April 2016 which was redeemed early on April 15, and returned 145.75%, or 13.38% pa. The collateralised product was distributed via Mariana Capital Markets in the UK and the credit risk of the investment was, apart from Deutsche, depending on Citigroup, JP Morgan Chase and UBS.

The positive market value of derivative financial instruments increased by €45.9 billion, with a corresponding increase of €45.6 billion in negative market value of derivative financial instruments due to market movements, ‘primarily in interest rates’.

The financial liabilities, which include structured note issuances, structured deposits, and other structured securities issued by consolidated vehicles – which may not be quoted in an active market – stood at €457.8 million at June 30 2019, up 10% from year-end 2018.

Total outstanding long-term debt at the end of June was €147.6 billion (December 31 2018: €152 billion) of which €102.8 billion senior debt (€77.6 billion fixed rate notes and €25.2 billion floating rate notes).

Click the link to view the full 2Q2019 results and the interim report.