Deutsche Bank posts best profit in a decade but warns 800 job cuts as cost cutting continues
Deutsche Bank recorded its best profit in a decade as the bank recorded its 11th consecutive quarter of profit but signalled there would be more job cuts as it continues its restructuring efforts.
Pretax profit climbed 12 per cent to €1.9bn (£1.68bn), up from €1.7bn (£1.5bn) last year with a strong performance from the corporate bank and private bank. This was driven mostly by higher interest income.
The strong performance in these divisions helped offset a 19 per cent fall in investment banking revenue. Fixed income revenue, a traditional strength, fell 17 per cent.
The German lender has been engaged in widespread restructuring since 2019, with its results improving after years of underperformance. Chief executive Christian Sewing said the results demonstrate “the relevance of our Global Hausbank strategy”.
The bank announced plans to accelerate its strategy, including attempts to cut costs by €500m over the next few years. This will include 800 job cuts in a range of non-client facing senior roles globally.
Deutsche Bank set aside €372m (£329m) in the quarter, up from €292m (£2588) the year before, reflecting provisions for “a small number of idiosyncratic events” in the international private bank.
Chief financial officer James van Moltke said the results “proved the strength and resilience of Deutsche Bank in challenging conditions.”
Van Moltke said the bank suffered from a “speculative attack” during March. Shortly after the collapse of Silicon Valley Bank and UBS’s acquisition of Credit Suisse, Deutsche Bank’s share price plunged and the cost of insuring its debt against default spiked.
At the end of March, its CET1 ratio stood at 13.6 per cent, exceeding its target of 13 per cent while its liquidity coverage ratio was stable at 143 per cent.
“These are figures we can be proud of – and I am particularly pleased because they underpin what some people had tried to cast doubt on during the market turmoil in March: the stability and resilience of our bank,” Sewing said.
While Deutsche Bank’s share price has mostly recovered since then, the bank reported that deposits slipped 12 per cent to €592m (£524m).