Salem Radio Network News Tuesday, September 28, 2021

Business

Deutsche Bank’s second-quarter net profit tops estimates

FRANKFURT (Reuters) – Deutsche Bank delivered a better-than-expected second-quarter profit despite a decline in its investment banking revenue and some unexpected costs, quarterly figures published by Germany’s biggest lender on Wednesday showed.

It was the fourth consecutive quarterly profit, the bank’s longest streak in the black since 2012.

Net profit attributable to shareholders came in at 692 million euros ($818 million), from a loss of 77 million euros a year earlier. The figures were better than analyst expectations for a profit of 372 million euros.

Graphic: Deutsche Bank results – https://graphics.reuters.com/DEUTSCHEBANK-RESULTS/lgpdwmokgvo/chart.png

The profit figures are good news for Chief Executive Officer Christian Sewing, who launched a major restructuring in 2019 that involved shedding 18,000 staff in the hopes of returning the bank to profitability.

“Our priority now is to continue with our disciplined execution of transformation, quarter by quarter,” Sewing said in a statement.

The company decided to abandon a key target – an aim of reducing costs to 16.7 billion euros by 2022. The move came in after Deutsche Bank flagged a number of unexpected costs in recent months.

Sewing said he was committed to a 70% cost-income ratio target, as the lender will now focus on cost-to-income ratio.

Much has been riding on the performance of Deutsche’s investment bank, the group’s biggest revenue generator which helped the bank eke out a small profit for 2020, its first after five years of losses. Gains in the investment banking unit drove the bank to its strongest quarter in seven years at the start of 2021.

Revenue at the unit declined 11% in the second quarter from a year earlier. It was the biggest fall in investment banking revenue since the bank’s revamp two years ago, but U.S. rivals also saw declines in the quarter.

Graphic: Investment bank revenue – https://graphics.reuters.com/DEUTSCHEBANK-RESULTS/zdpxoyxddvx/chart.png

Investors have wondered how sustainable progress will be as the bank continues to make efforts to boost profitability after years of losses.

The unit lost market share across an array of key services in the second quarter, data from Dealogic shows, demonstrating the fragility of the recovery for the German lender.

($1 = 0.8460 euros)

(Reporting by Tom Sims and Patricia Uhlig; Editing by Kirsti Knolle, Maria Sheahan, and Sherry Jacob-Phillips)

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