By Tom Sims

FRANKFURT (Reuters) - A bigger than expected loss in the fourth quarter and weakness at its investment bank overshadowed the first annual profit in four years for Deutsche Bank.

Germany's largest lender has been trying to turn itself around under a new leadership, but has faced a series of hurdles, including allegations of money laundering, ratings downgrades and failed stress tests.

Deutsche has also become the subject of rampant merger speculation, and Friday's earnings figures underscore that the company still has a long way ahead to post a sustainable profit.

Time is running out for the bank to turn around on its own, making a merger with rival Commerzbank more likely, two people with knowledge of the matter said on Thursday.

Results were a mixed bag, with Deutsche posting a full-year profit of 341 million euros ($390 million), compared with a net loss of 735 million euros in 2017.

"Our return to profitability shows that Deutsche Bank is on the right track," said Chief Executive Christian Sewing, who took over last April and has embarked on plans to cut more than 7,000 jobs in an overhaul of the bank.

"In 2019, we aim not only to save costs but also to make focused investments in growth," he said.

PROFIT GROWTH FORECAST