Deutsche Bank’s offices in the City of London on July 2, 2024, were the focal point as the German multinational investment bank reported a narrower-than-expected loss, breaking a 15-quarter profit streak. Headquartered in Frankfurt, Deutsche Bank AG posted a net loss attributable to shareholders of 143 million euros ($155.1 million), slightly better than analysts’ predictions of 145 million euros, according to an LSEG poll.
The bank’s loss came as it allocated a provision of 1.3 billion euros for an ongoing lawsuit related to its 2010 acquisition of Postbank. Investors have long claimed that Deutsche Bank underpaid in the deal. Despite this setback, the bank’s net revenue rose by 2% to reach 7.6 billion euros for the second quarter, with efficiency savings hitting 1.5 billion euros.
The revenue performance varied across divisions: the investment bank saw a 10% increase year-on-year to 2.6 billion euros, while revenue in fixed income and currencies dropped by 3% to 2.1 billion euros. Corporate banking revenue remained nearly unchanged at 1.9 billion euros.
Excluding the Postbank provision, Deutsche Bank’s pre-tax profit was 1.7 billion euros, up from 1.4 billion euros in the same quarter last year. The bank’s provision for credit losses increased to 476 million euros from 401 million euros a year earlier, and its CET 1 capital ratio, an indicator of solvency, slightly increased to 13.5% from 13.4% in the previous quarter.
CEO Christian Sewing affirmed the bank’s commitment to shareholder distribution, aiming for more than 8 billion euros in share buybacks by 2025. So far, 3.3 billion euros has been distributed. CFO James von Moltke highlighted positive trends for the latter half of the year, particularly in net interest income and the bank’s origination and advisory business, which saw revenue double year-on-year.
This second-quarter outcome extends Deutsche Bank’s pattern of surpassing earnings expectations, with its last significant profit report being the highest since 2013. The announcement coincided with strong performances from other European banks, like UniCredit and Santander, further emphasizing the competitive financial landscape.
Original Story https://www.cnbc.com/2024/07/24/deutsche-bank-dbk-q2-earnings.html
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