FRANKFURT (Reuters) - Deutsche Bank's DBKGn.DE shares fell nearly 10 percent on Thursday after warning it would report a record loss for 2015, highlighting the scale of the problems facing new Chief Executive John Cryan as he restructures Germany's biggest bank.

The Deutsche Bank headquarters are seen in Frankfurt, Germany October 29, 2015. REUTERS/Kai Pfaffenbach

The bank said late on Wednesday it expected to report a net loss of about 6.7 billion euros ($7.3 billion), as writedowns, litigation charges and restructuring costs were compounded by tough trading conditions in the fourth quarter.

Cryan, who took charge of the bank six months ago, was initially praised for his plain-spoken assessment and pragmatic approach to the bank’s challenges but investors on Thursday showed signs their patience was beginning to thin.

“Where, along with the falling revenues, are the promised cost cuts? I don’t see them,” said one Top-10 shareholder.

After surprising markets in October with a record 6.2 billion euro loss in the third quarter, Deutsche Bank said on Wednesday it expected its fourth-quarter loss to be about 2.1 billion euros.

Quarterly revenue fell by 15 percent to 6.6 billion euros, hit by what it called “challenging market conditions”, but analysts said Deutsche’s revenue performance appeared weaker than that of its U.S. peers.

The bank’s troubles renewed analysts’ concerns that it might now need to raise more capital to strengthen its finances.

Deutsche Bank booked litigation charges of 1.2 billion euros in the quarter, alongside costs for restructuring and severance packages of 0.8 billion euros, mainly related to its retail bank.

Fund manager Ingo Speich at top-20 shareholder Union Investment said the continuous drip feed of charges was damaging Deutsche Bank’s credibility.

“Has the place been swept clean or is there still more to come? We need clarity on where earnings will come from in the next 12-18 months,” he said.

In a letter to employees, Cryan described the full-year loss -- the bank’s first since 2008 -- as “sobering” but needed to fulfill the plan to make the bank simpler and more efficient.

“The charges we took are the consequence of necessary decisions in the framework of our Strategy 2020,” Cryan said.

LEADER OF THE OPPOSITION

Inside the bank, some high-ranking voices raised the concern that Cryan’s public criticism of the bank’s culture, business practices and disjointed IT systems risked damaging employee morale and scaring away customers.

“He shouldn’t forget: Cryan is not the leader of the opposition; he’s the head of the bank,” said one source close to Deutsche Bank’s supervisory board.

The share price has fallen by nearly 40 percent since Cryan took the helm on July 1, promising simultaneously to overhaul Deutsche to meet tighter banking rules and to end costly litigation from past scandals.

The share price fell by more than 9.5 percent to a seven- year low in morning trade on Thursday before paring losses to trade down 3.4 percent at 17.13 euros by 1608 GMT, when the blue chip Dax index <0#.GDAXI> was up 2.3 percent.

CAPITAL HIKE

Analysts did not rule out there could be more pain to come.

“We see further downside risk on litigation – we model another 3.6 billion euros in 2016 – which is likely to necessitate a capital raise,” analysts for Citi said, rating the stock “neutral/high risk” and cutting their price target to 20 euros from 27 euros.

Analysts at Goldman Sachs, which has a “neutral” investment rating for the shares, said they expected litigation issues to persist for a “multi-year period”. But even without such charges, the underlying trends looked weak, they added.

In an attempt to reduce the size of the bank and make it more profitable, Cryan has announced 15,000 job cuts and plans to shed businesses employing a further 20,000 people.

In October he also warned that the bank faces two tough years of dividend cuts, pay restraint and harsh restructuring measures, admitting to grave problems in implementing strategic and cultural change.

However, UBS analyst Daniele Brupbacher said that while a true fresh start would mean lower net profits for a period, he believed the bank intended to manage its turnaround without raising fresh capital.

Deutsche Bank is due to report full results for 2015 on Jan. 28.

($1 = 0.9183 euros)