Connect with us

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website. .

Banking

Deutsche Bank reports big jump in profit despite slump in dealmaking

Published : , on

By Tom Sims and Marta Orosz

FRANKFURT (Reuters) – Deutsche Bank on Wednesday posted a better-than-expected jump in third-quarter profit as a trading boom at its investment bank offset a nosedive in dealmaking, but executives highlighted risks to the economy in the months to come.

Despite its ninth consecutive quarter of profit after years of losses Germany’s largest lender warned of an “increasingly challenging” environment and “intensified” cost pressures.

This year the bank and its chief executive Christian Sewing aim to deliver on targets set out in a costly overhaul launched in 2019.

The results come amid a week of earnings reports by major lenders across Europe, where investors are watching for signs that a weaker economy will hurt business.

Net profit attributable to shareholders was 1.115 billion euros ($1.11 billion) versus 194 million euros a year earlier, and better than analyst expectations of about 835 million.

Shares were up 1% in early trade, though they are down 15% so far this year.

“We have significantly improved Deutsche Bank’s earnings power and we are well on track to meet our 2022 goals,” Sewing said.

At the same time, Sewing will warn analysts in a call later on Wednesday that “we continue to operate in a difficult and uncertain environment”, according to a transcript of his remarks.

Finance chief James von Moltke told reporters that loan growth would “undoubtedly” slow and it was “realistic” next year will carry some risk.

The bank set aside 350 million euros in provisions for possible souring loans, a jump from 117 million euros a year ago.

Revenue rose at the bank’s major divisions, and Deutsche upgraded its outlook for the investment bank, saying it expected revenue in the unit to be “slightly higher”, compared with previous expectations for “essentially flat”.

The figures are good news for the bank after a barrage of negative headlines in recent days.

Last week, German prosecutors searched its headquarters in connection with an investigation of the multibillion-euro tax fraud scheme in a blow to a bank that has been trying to rebuild its reputation after compliance lapses.

This week, a German consumer group said it was suing Deutsche Bank’s asset management unit DWS for allegedly misrepresenting a fund’s green credentials in marketing materials. DWS rejects the allegations.

Deutsche is also trimming staff at its investment bank, people with knowledge of the matter have told Reuters, as a pullback in financing deals compels lenders to limit costs.

Sewing, in a letter to employees on Wednesday, said it is “essential that we continue to pay close attention to costs”.

Deutsche’s update came after some U.S. rivals reported mixed results on Wall Street, where profits slid as investment banking was hit hard, and executives braced for a weaker economy.

Deutsche – like its Wall Street competitors – was hurt by declines in dealmaking, although trading held up because of volatile markets.

Overall investment banking revenue rose 6%, better than the 1.4% rise expected by analysts.

Revenue from the investment bank’s origination and advisory business fell 85% in the quarter, compared with expectations for a 61% drop.

Revenue for fixed-income and currency trading, one of the bank’s largest divisions, rose 38%, better than expectations for a 26% rise.

The investment bank in recent years recovered from being its problem child to its strongest revenue generator thanks to a coronavirus pandemic trading boom and a dealmaking frenzy.

Among Deutsche’s other major divisions, corporate bank revenue rose 25%, while private bank revenue increased by 13%.

($1 = 1.0047 euros)

(Reporting by Tom Sims and Marta Orosz; Editing by Robert Birsel and Jason Neely)

Jesse Pitts has been with the Global Banking & Finance Review since 2016, serving in various capacities, including Graphic Designer, Content Publisher, and Editorial Assistant. As the sole graphic designer for the company, Jesse plays a crucial role in shaping the visual identity of Global Banking & Finance Review. Additionally, Jesse manages the publishing of content across multiple platforms, including Global Banking & Finance Review, Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.

Global Banking & Finance Review

 

Why waste money on news and opinions when you can access them for free?

Take advantage of our newsletter subscription and stay informed on the go!


By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Post