Deutsche Bank posts ninth successive quarterly profit as turnaround efforts yield gains

ONE OF Europe’s biggest lender’s Deutsche Bank has notched its ninth successive quarterly profit, marking a big turnaround after years of being mired in scandal and losses.

The German giant said today profits hit €1.12bn (£975m) in the three months to September, up from €194m (£167m) in the same period last year.

Deutsche Bank’s profits topped analysts’ forecasts, pushing its Dax-listed shares up 1.2 per cent today.

The firm led by Christian Sewing has for years been the sick man of the global banking sector. 

It has been embroiled in money laundering scandals and has struggled to lift its bottom line out of the red.

However, a huge restructuring drive and stronger focus on better performing areas of the business such as its investment banking arm have transformed Deutsche Bank into one of the sector’s top performers.

“In the third quarter and first nine months of 2022, we delivered our best profits in more than a decade for both these periods. This underlines the success of our transformation efforts”, Sewing, 52, said.

Analysts are scrutinising European banks’ third quarter earnings season, which kicked off this week, for signs of whether central banks around the world lifting interest rates steeply to curb inflation has boosted their finances.

UK banks’ HSBC, Barclays and Standard Chartered have all this week said their profits were lifted by higher net interest income.

Deutsche Bank followed suit. Corporate banking income climbed a quarter over the last year, up to €1.6bn (£1.39bn), driven by “increases in both net interest income and commission and fee income,” the firm said.

Net interest income is the difference between what a bank pays depositors and receives from borrowers. It is a key source of revenue for the sector.

For over a decade, lenders have been grappling with rock-bottom borrowing costs.

However, the Bank of England and European Central Bank (ECB) have hiked rates steeply to tame inflation hitting 10.1 per cent and 9.9 per cent in their respective economies.

The ECB tomorrow is expected to lift eurozone rates 75 basis points for the second time in a row.

Interest rates have risen steeply this year