* Bank says top managers to forego bonus payouts
* Bank cites higher costs due to disposal delays, Brexit
* CEO defends bonuses as investment in staff
* Bank sees higher revenue in 2018 vs 2017 (Recasts, adds details on compensation)
FRANKFURT, March 16 (Reuters) - Deutsche Bank paid bonuses worth 2.3 billion euros ($2.83 billion) for 2017, four times higher than the previous year even as the German lender warned on costs for 2018 and reported a bigger 2017 loss than previously disclosed.
Germany's flagship lender said on Friday top managers would forego payouts for 2017 after the bank said it lost 735 million euros, the third annual loss in a row and more than the 497 million euros it had initially disclosed in February.
The bank, which distributed 546 million euros in bonuses in 2016, also said its cost cutting plans were hitting roadblocks, partly because of a delay in disposals.
In addition, the lender said it expected higher costs related to Britain's exit from the European Union and a postponement in savings from the merger of its in-house retail bank with Postbank.
"Those savings are now expected to be realized in 2019," the bank said, adding adjusted costs in 2018 were now expected to be 23 billion euros, up from its original forecast for 22 billion.
Chief Executive John Cryan defended the rise in bonus payments as an effort to retain staff.
"If we want to live up to our claim of being the leading European bank with a global network, we have to invest in our employees so that we can continue to provide the best solutions for our clients," he said in a letter to shareholders.
The bank was cautiously optimistic for this year, saying: "For 2018, we expect revenues to be higher than in 2017."
($1 = 0.8115 euros) (Reporting by Tom Sims Editing by Maria Sheahan and Edmund Blair)