Deutsche Bank Cuts Staff Bonuses

German banking giant Deutsche Bank cut its bonuses by more than three-quarters last year, its annual report and accounts show.

Bonuses were cut to 0.5bn euros (£433m) from 2.4bn euros a year earlier. Total pay at the bank, which employs about 100,000 people worldwide, was 8.9bn euros in 2016, down from 10.5bn the year before.

Deutsche has been cutting costs – it shed more than a thousand jobs last year – and raising money.

It is in the process of raising 8bn euros through selling new shares. On Monday, Deutsche’s shares opened down 1% at 17.67 euros.

Deutsche Bank reported an annual loss of 1.4bn euros (£1.2bn) for 2016 after being hit by legal costs, although that was down from a loss of 6.4bn euros the previous year.

In the final three months of 2016 alone the bank lost 1.9bn euros, mainly thanks to a record penalty in the US.

In January, it was fined £500m by US and UK regulators in connection with a Russian money laundering plan.

Major banks have paid heavy fines and other penalties in recent years for a range of misdemeanours, including interest rate and currency rigging, and mis-selling of products.

They are also finding conditions tough as regulations tighten.

Persistent low interest rates are another element of the tougher climate for banks, as it is far more difficult to make a profit when the difference between borrowing and deposit rates is so small.

Deutsche Bank, which last year was deemed the riskiest bank in the world by the International Monetary Fund for its global interconnectedness and weakness, has been slower than rivals to take action to recover from the financial crisis of 2008, giving it less strength to ride the weak business banking climate.

Deutsche Bank is currently in the process of closing 200 branches in Germany and laying off about 9,000 of its roughly 100,000 full-time staff.

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