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Deutsche Bank Lost €68M On Operation Tag

8 May 2017 – Voz Pópuli

Deutsche Bank España recorded losses of €68 million on so-called Operation Tag, which was agreed last October, and which involved the sale of a portfolio of non-performing loans and real estate assets to the fund Oaktree for €430 million. And, the negative result from that operation drastically reduced the entity’s profit last year, which fell from €91.4 million in 2015 to €5.7 million in 2016.

The operation involved the sale of a loan portfolio that contained “a series of loans that had already been recognised as non-performing”, as well as foreclosed assets. The bank acknowledges in its most recent annual financial report that the sale “had a negative impact of €68.1 million on the entity’s income statement”. Of that amount, €40.4 million corresponded to the sale of the loan portfolio and €4.7 million to the sale of the foreclosed properties.

Part of the agreed sale of the properties was signed during the first quarter of 2017. They included assets located in Cataluña, which had a gross value on the group’s books of €7 million and which ended up being sold for €4.4 million. The other real estate assets had a book value of €29 million but their sales price was much lower, €8.1 million.

Operation Tag also had an additional cost of €23 million for Deutsche Bank España. The costs arising from the sale amounted to €8.1 million and those relating to adapting the workforce to the new structure amounted to €14.9 million.

Early retirement

In 2016, Deutsche Bank España processed the early retirement of 108 employees, compared with 24 early retirees in 2015. The entity explains in its latest accounts that the amount of pensions caused, €155 million, corresponds to commitments for pensions caused with the retiring and early-retiring employees and that those commitments are “insured or provisioned by an internal fund”. Last year, the bank recognised a provision of €13.9 million for early retirees.

In March, Deutsche Bank announced its plans to sell its retail business in Spain. The entity currently serves more than 700,00 clients in the country and employs almost 2,600 people in its retail division.

Original story: Voz Pópuli (by Alberto Ortín)

Translation: Carmel Drake

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