Deutsche Bank’s Q3 Net Profit Falls 8% Despite Estimate Beat

by IS_Indust
Deutsche Bank

Deutsche Bank reported a third-quarter net profit of 1.031 billion euros, slightly exceeding expectations despite an 8% decline from the previous year. This marked the bank’s thirteenth consecutive profitable quarter since its large-scale restructuring in 2019. The net profit was 35% higher than the previous quarter, showcasing resilience despite a year-on-year dip.

The bank’s corporate banking business delivered a strong performance, with revenues rising 21% year-on-year to 1.89 billion euros. However, its investment arm experienced a slowdown, with net revenues falling 4% year-on-year to 2.27 billion euros. The investment banking unit’s performance is described as “pretty much in line with the market” on an underlying basis, according to Deutsche Bank CFO James von Moltke. He noted a normalization of fixed income and currency revenues, particularly in macro businesses like rates, foreign exchange, and emerging markets.

There has been a rotation of the bank’s activity towards other products, notably credit and financing, which have shown strength. Total revenues for the quarter stood at 7.13 billion euros, up from 6.92 billion in the third quarter of 2022. The provision for credit losses was 200 million euros, compared to 350 million in the same quarter of the previous year.

Deutsche Bank’s Common Equity Tier 1 (CET1) capital ratio, a measure of financial resilience, was 13.9%, up from 13.8% at the end of the second quarter and 13.3% in the third quarter of 2022. The return on tangible equity stood at 7.3%, an increase from 5.4% in the previous quarter.

Despite ongoing challenges in its investment unit, Deutsche Bank’s overall performance in the third quarter demonstrated its ability to navigate market conditions and sustain profitability.

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