- Advertisement -
AppsEntertainmentDeutsche Bank reports its best quarterly profit for seven...

Deutsche Bank reports its best quarterly profit for seven years


- Advertisment -spot_img

LONDON — Deutsche Bank on Wednesday reported a 908 million euro ($1.1 billion) profit for the first quarter, buoyed by continued strong performance in its investment banking division.

The bank vastly exceeded analyst expectations for net income of 642.95 million euros, according to Refinitiv, and showed a marked improvement from the 51 million euro profit eked out in the fourth quarter of 2020.

Here are the other highlights:

  • Total first-quarter net revenues were 7.2 billion euros, compared to 6.35 billion euros for the same period in 2020.
  • Common equity tier 1 (CET1) ratio — a measure of bank solvency —  came in at 13.7%, compared to 12.8% for the first quarter of 2020.
  • First-quarter loan loss provisions were 69 million, down 86% from the 506 million in the first quarter of 2020.
  • Return on tangible equity (RoTE) hit 7.4%, up from 3% in the same three months of last year.

Germany’s largest lender followed in the footsteps of many of its Wall Street rivals in posting a substantial earnings beat, with Goldman Sachs, JPMorgan and Morgan Stanley all smashing through first-quarter expectations in recent weeks.

Investment bank revenues came in at 3.1 billion euros, up 32% year-on-year, while profit before tax soared 134% to 1.5 billion euros.

While the investment bank and asset management unit, where revenues grew 23% year-on-year, were the key drivers of earnings growth, CFO James von Moltke told CNBC on Wednesday that Deutsche Bank was also pleased with its corporate and private bank performance.

“We have talked about how those businesses are still fighting through the headwinds of negative interest rates, but that we are seeing underlying growth in them more than offsetting, or offsetting at least, the interest rate headwinds,” von Moltke said.

The investment bank performance was driven largely by a 34% climb in revenues in the fixed income and currencies (FIC) division to 2.5 billion euros, buoyed by strong year-on-year growth in the credit market.

“The credit business year-on-year of course was very strong, and so you had some mark-to-market losses in the environment that we had last year and a pretty strong environment for credit this year,” von Moltke said.

“What I call the macro products of FX, rates and emerging markets, we have seen some more normalization through the course of the first quarter.”

Von Moltke added that while the normalization of the macro themes that had been driving investment bank growth had continued into the second quarter, the overall environment was still “reasonably encouraging.”

The bank also avoided the fallout from collapsed U.S. hedge fund Archegos Capital which saw UBS, Credit Suisse and several others take significant hits in the first quarter.

The bank has embarked on a mass restructure of its business over the past two years, the cost of which had weighed on earnings alongside elevated credit provisions. However, Deutsche swung back to profit in 2020, reporting full-year net profit of 113 million euros.


Please enter your comment!
Please enter your name here

Latest news

One arrested in connection with wildfire raging in western Los Angeles

One man has been arrested in connection with a roaring brushfire that has vexed Southern California first responders...

AT&T announces $43 billion deal to merge WarnerMedia with Discovery

Telecom giant AT&T announced Monday a deal to combine its content unit WarnerMedia with Discovery, paving the way...

Opinion | The cicadas are coming and bringing an important message about time with them

The cicadas are coming any day now. Neighbors are talking. Garden centers are selling netting. Kids and other...

Governments are deploying ‘wartime-like’ efforts to win the global semiconductor race

Integrated circuits on a circuit board.filonmar | E+ | Getty ImagesTiny pieces of silicon with intricate circuits on...
- Advertisement -spot_imgspot_img

‘Suspicious’ brushfire in Los Angeles grows to more than 1,300 acres

Roughly 1,000 people in Los Angeles remained under evacuation orders Sunday, and residents in another 130 homes were...

AT&T in advanced talks to merge WarnerMedia with Discovery, deal expected as soon as tomorrow

Combined images of AT&T CEO John Stankey (L)and WarnerMedia CEO Jason Kilar.ReutersAT&T is in advanced talks to merge...

Must read

- Advertisement -spot_imgspot_img

You might also likeRELATED
Recommended to you