FRANKFURT (Reuters) - Deutsche Bank AG (>> Deutsche Bank AG) increased pay for its co-chief executives by more than half in 2013, a year when Germany's largest bank paid out billions of euros for past misdemeanours partly stemming from the financial crisis.

The co-CEOs Juergen Fitschen and Anshu Jain join the list of bank bosses to get chunky pay rises even though banks across Europe are still cutting jobs and struggling to boost returns in the wake of the crisis.

Deutsche's annual report, published on Thursday, showed that the bank paid 38 percent more to its management board in 2013, with Jain's total pay including pension up by more than half to almost 9 million euros ($12.52 million). Fitschen's pay rose by broadly the same amount to 8 million euros.

Part of the increase reflected the fact that Jain and Fitschen were promoted half way through 2012 and received more pay as a result.

Banks' executive pay has become a hot issue for politicians, shareholders and regulators in Europe. British bank Barclays (>> Barclays PLC), for example, faced a wave of criticism after it raised bonuses for 2013 after profits fell.

Deutsche's annual report said the bank was on track to meet its 2015 targets in investment banking but that it was counting on weaker competition and the sale of some assets to boost its business.

Deutsche Bank has made 2014 a make or break year as it cuts costs, slashes its balance sheet and works through a long list of scandals. But it will be a long haul to meet its self-imposed targets. The bank's return on equity - a profit measure - will need to increase more than 12-fold from its 2013 level to hit the 2015 target of 15 percent after-tax.

Regulatory issues, such as a global investigation into alleged currency market manipulation, could mean more money has to be set aside to cover related costs. The bank has already paid out about 2.5 billion euros in 2012 and also in 2013 in settlements and fines.

In the annual report, net profits for 2013 were restated to 681 million euros. This was down from net profit of 1.082 billion euros reported in January to reflect legal settlement costs, mainly relating to the long-running Kirch case, which Deutsche settled in February.

The bank has already said its investment bank has had a slow start to the year due to uncertainty over the crisis in Ukraine and concerns over growth in China and Germany.

In the annual report Deutsche said: "We expect global fixed income revenues to slightly shrink in 2014 versus 2013 levels."

Fixed income or debt trading has suffered from weaker market activity, with revenue in the first quarter at Europe's investment banks set to fall 20 percent from a year ago, analysts at Morgan Stanley estimated.

Deutsche and Barclays (>> Barclays PLC) would be hardest hit as they have the biggest bond trading businesses in Europe.

Deutsche has said it aims to move some of its fixed income operations from Europe to the United States to take advantage of faster economic growth there.

The annual report also showed that co-CEO Jain got 804,032 euros in additional benefits - items that include bodyguards and insurance - more than three times what Fitschen received.

Jain is getting one of the biggest pay increases among other leading bankers to report so far. He voluntarily declined 2 million euros of investment-banking related compensation in 2012, a year when the bank posted 291 million euros net profit.

Michael Diekmann, chief executive at insurer Allianz (>> Allianz SE), for example, earned 7.2 million euros in compensation and delivered a profit of around 10 billion euros.

HSBC's (>> HSBC Holdings plc) CEO Stuart Gulliver was paid 8 million pounds for 2013, up 26 percent on the year. UBS (>> UBS AG) CEO Sergio Ermotti was paid 10.7 million Swiss francs ($12.3 million) for 2013, up 21 percent on the year.

U.S. bank chiefs can be paid considerably more.

JPMorgan's (>> JPMorgan Chase & Co.) Jamie Dimon received $20 million for 2013, up 74 percent on the year even after the bank faced $20 billion of legal settlements. Wells Fargo (>> Wells Fargo & Co) CEO John Stumpf earned $19.3 million in 2013, the same as 2012.

Deutsche Bank's total bonuses were unchanged from the previous year at 3.2 billion euros, while overall pay dropped 3 percent to 9.9 billion euros, which equates to over 100,000 euros per employee.

(Reporting by Thomas Atkins and Arno Schuetze. Additional reporting by Steve Slater and Carmel Crimmins.; Editing by David Holmes and Jane Merriman)

By Thomas Atkins