Germany's biggest lender surprised investors by posting a 2.6 billion euro ($3.5 billion) net loss in the fourth quarter of 2012, due to legal and restructuring charges. Spain's Santander saw its full year profits drop more than forecast, but investors hope banks are putting bad times behind them. Joanna Partridge reports
Germany's flagship lender isn't used such disappointing results. Deutsche Bank posted at 2.6 billion euro pretax loss in the fourth quarter. That shocked analysts - who'd expected it to make a profit of around 110 million euros. The lender's loss was due to legal and restructuring charges. Juergen Fitschen is the bank's Co-CEO. He says they want to draw a line under past scandals and strengthen its capital position, given the tougher regulatory environment. SOUNDBITE: Juergen Fitschen, Co-CEO of Deutsche Bank, saying (German): "This decision had a considerable financial effect in the fourth quarter on our results. But our priorities are clear, we want to make Deutsche Bank fit for the future. We are certain that we're following the right strategy, and are once again strengthening our vision of becoming the leading, customer-orientated global universal bank." Frankfurt trader Robert Halver says the figures are only shocking at first glance. SOUNDBITE: Robert Halver, Baader Bank, saying (German): "The second glance is important, as you see Deutsche Bank is in the position to start again with a blank slate. It's managed to create a culture change by making massive writedowns on the businesses they don't want to be as active in in future. No other bank can manage this. I think such a break might endanger the existence of some other banks in the world, but with Deutsche you have to say it still has the potential to be a leading global bank." Investors still see that potential - Deutsche Bank shares were up two and a half percent after the results. But it's not the only lender to have disappointed. Spain's Santander, the largest bank in the euro zone, said its annual net profit dropped by 59%, more than was expected. The lender says it's now taken the worst pain from Spain's real estate crash. Angus Campbell from London Capital Group says the figures are a reminder of the ongoing difficulties faced by banks. SOUNDBITE: Angus Campbell, Head of Market Analysis,London Capital Group, saying (English): "They're going through various scandals, LIBOR, and things like that. They're going through having to rebuild their capital bases, they're having to take huge write-downs, you know, these things are going to take quite some time to really push through because after all, we had years of them building up these huge assets during the boom times." European banks have recently been hit by a string of scandals. Investors will be hoping these lenders are taking a hit now, to emerge stronger in the future.