Deutsche Bank posts 1.9 billion euros in quarterly profit
Deutsche Bank reported higher third-quarter revenue and pre-tax profit while keeping noninterest expenses unchanged. Its cost-to-income ratio improved, and client assets increased with strong inflows into private banking and asset management. Credit-loss provisions rose from the preceding quarter, reflecting commercial property risk reduction and an individual corporate banking event. Management retained an annual revenue ambition above 33 billion euros.
Economics & Markets··Evening
Revenue grows with unchanged expenses
Deutsche Bank, the German banking group, earned approximately 1.9 billion euros after tax in the third quarter. Pre-tax profit increased 8 per cent from the previous year to 2.6 billion euros, while revenue grew 4 per cent to 8.3 billion euros. Diluted earnings per share reached 0.94 euros, up 6 per cent. The bank kept noninterest expenses unchanged at 5.2 billion euros. Its cost-to-income ratio fell to 62.4 per cent from 64.4 per cent a year earlier. Post-tax return on tangible equity was 10.6 per cent, compared with 10.7 per cent in the prior-year quarter, which had benefited from favorable tax effects.[1], [2]
Client inflows lift managed assets
Private Bank and Asset Management together increased assets under management by 50 billion euros during the quarter to 2.0 trillion euros. Net inflows accounted for 47 billion euros. Across the banking group, loans increased 22 billion euros, or 5 per cent, from a year earlier; deposits rose 53 billion euros, or 8 per cent. Corporate Bank recorded its highest revenue, and Wealth Management achieved double-digit revenue growth. Investment Bank revenue broadly matched the record level of the previous year’s third quarter. Within that business, Fixed Income & Currencies revenue amounted to 2.4 billion euros and was lower than in the corresponding quarter a year earlier.[1]
Provisions rise as capital remains at 14 per cent
Credit-loss provisions rose 9 per cent from the preceding quarter to 501 million euros. Deutsche Bank linked the provisions to commercial real-estate de-risking and an individual Corporate Bank event among other factors. Its common equity tier one capital ratio stood at 14.0 per cent. The bank completed 1.5 billion euros of share repurchases during the year. Over the first nine months, after-tax profit increased 7 per cent to 5.9 billion euros and pre-tax profit rose 8 per cent to 8.4 billion euros. Nine-month revenue grew 5 per cent to 25.5 billion euros. Management said its full-year revenue ambition was above 33 billion euros.[1]
