Deutsche Bank sees 11-year high quarterly profit, boosted by investment wing

ADVERTISEMENT

Deutsche Bank has recorded a first quarter net income of €1.45 billion, 10% more than the total made during the same period last year.

The figure came in above analysts' expectations and also marks the group's highest first-quarter profit since 2013.

Net revenues, meaning earnings made before deducting expenses, grew 1% year on year to €7.8 billion, which was primarily driven by growth in commissions and fee income.

Meanwhile, revenue at Deutsche Bank's Investment wing was up 13%, at €3 billion.

This was boosted by a 7% increase in trading of fixed-income assets such as bonds.

Origination and advisory revenues within the Investment wing were also up 54%, the highest level for nine quarters, and financing revenues saw a 14% year-on-year rise.

That division is responsible for a range of financial services; for example, employees may advise clients on mergers and acquisitions or on how to optimise their business operations more generally.

The strong results on the investment front mark a turning point following a 9% revenue slump recorded for the whole of 2023.

CEO Christian Sewing has pledged to lift Deutsche Bank's total revenue to €30 billion this year in a bid to boost profitability.

Some analysts have branded this target as unrealistic given predictions regarding upcoming interest rate cuts, meaning that banks are likely to be charging lower fees on their loans.

Despite this, the German lender is steaming ahead with cost cutting strategies, announcing 3,500 job cuts in February.

Thursday's earnings, although positive overall, were less rosy for certain divisions.

Revenue at the corporate bank fell 5% year-on-year while private bank revenue fell was down around 2%.

By around noon on Thursday, Deutsche Bank's shares were down some 1.36%.

Analysts have suggested the dip can be explained by a lack of guidance on net interest income for the coming year.