London (CNN Business) Germany's biggest bank swears its radical overhaul will eventually pay off. But a $3.5 billion loss in the second quarter shows how much pain Deutsche Bank could face in the meantime, and it could amplify calls for the lender to move faster.

said Wednesday that it took a charge of €3.4 billion ($3.8 billion) for the three months ending in June, leading to a net loss of €3.1 billion ($3.46 billion).

The performance was even worse than the bank had telegraphed . It said on July 7 that costs related to the overhaul would push it to a net loss of €2.8 billion ($3.1 billion) for the second quarter.

Shares dropped more than 5% in Frankfurt before recovering some of the loss.

Without the restructuring cost, Deutsche Bank said it would have reported a net profit of €231 million ($257.4 million), down 42% on the same period last year.

"Excluding transformation charges the bank would be profitable and in our more stable businesses revenues were flat or growing," CEO Christian Sewing said in a statement.

But even that profit number was below what analysts had predicted.

Turnaround skepticism

Deutsche Bank has for years struggled to produce consistent profits despite a series of overhauls. Earlier this month, under significant pressure from investors, the bank launched its boldest bid to get back on track.

The lender is cutting 18,000 jobs while dramatically shrinking its investment banking business, shuttering its equities sales and trading unit while cutting back its rates division.

It's also creating a "bad bank" for €74 billion ($83 billion) in assets that eat up too much capital. Those assets will be sold over the coming years, freeing up money to invest elsewhere.

Goldman Sachs GS Morgan Stanley MS Sewing has described the plans as "nothing short of reinventing" the 149-year-old bank. After two decades of trying to compete withand, Deutsche Bank will shift its focus to more reliable sources of revenue, such as corporate money management.

Yet reinvention is expensive, and carries with it big risks on execution.

The transition is expected to carry a price tag of €7.4 billion ($8.3 billion) by 2022. Analysts have also expressed concern about the pace of planned changes, noting the three-year time horizon.

Deutsche Bank needs to offload assets in the bad bank faster than planned, JPMorgan Chase analysts Kian Abouhossein and Amit Ranjan said in a note Wednesday. It also needs to cut costs more quickly to start building up necessary capital, they added.

The bank is taking heat from investors in the meantime. The company's stock, which hit a record low in June, is down almost 3% since the turnaround plan was announced — hardly a vote of confidence.

Early results

Sewing told employees on Wednesday that the bank's reform efforts have put the bank on the right track.

"We can say with confidence that we have passed the first hurdle: by and large our strategy is no longer being called into question, either by our investors or by the media or — most importantly — by our clients," Sewing said in an email to staff that was published by the bank.

Much of the turnaround effort is already underway, he added.

The company has already starting winding down assets via the "bad bank," which it refers to as the Capital Release Unit. And more than 900 employees have either been given notice or informed that their role will be eliminated.

"This is painful, but it was important for us to give clarity rather than to leave people in limbo," Sewing said.

Despite this, the results included some early warning signs.

Revenues in the transaction banking unit, central to Sewing's vision for a new Deutsche Bank, fell 6% compared to the same period last year. When adjusting for a one-time deal in the second quarter of 2018, they were essentially flat.

And investment banking services the bank wants to hold onto, such as its advisory business, showed signs of strain. Revenues from the advisory unit fell 30%, the bank said. Sewing told analysts that he expects the team to gain market share in the future in light of a recruiting push.

Deutsche Bank also faces the prospect of even lower interest rates in the eurozone. Historically low rates have for years crimped lending profits, and analysts now expect the European Central Bank to push rates further into negative territory as soon as September.