Germany’s largest bank had previously warned it would be hit in the quarter by a provision for Postbank, and confirmed on Wednesday that it had set aside 1.3 billion euros. A long-running lawsuit by investors alleges Deutsche Bank paid too little when it bought the retail banking giant in 2010.
Deutsche Bank said second-quarter net revenue rose 2 percent to 7.6 billion euros and efficiency savings reached 1.5 billion euros.
Revenue reports varied across the business: Investment banking, which has performed well recently, saw revenues rise 10% year-on-year to 2.6 billion euros, while fixed income and currencies fell 3% to 2.1 billion euros. Corporate banking revenues were broadly stable at 1.9 billion euros.
Other highlights include:
- Pre-tax profit excluding Postbank provisions was €1.7 billion, up from €1.4 billion in the second quarter of 2023.
- The provision for credit losses was EUR 476 million, up from EUR 401 million a year earlier.
- The CET 1 capital ratio, which measures a bank’s solvency, rose to 13.5% from 13.4% in the first quarter of this year.
Chief Financial Officer James von Moltke told CNBC’s Caroline Ross that Deutsche Bank saw several positives in the second quarter, including net interest income. Net interest income from corporate banking fell 2% in the second quarter, according to earnings released Wednesday.
“Earlier this year, we expected net interest income to decline year-over-year. [20]”As of today, we believe that the banking book segment may stabilise and be roughly flat compared to last year. This reflects lower funding costs and improving spreads on both deposits and loans, which is very encouraging. Loan growth is still slower than we would like, but overall the picture is encouraging,” von Moltke said.
“We are starting to see the momentum we had hoped for on the financial markets and corporate finance side,” he added, noting that revenue from lending and advisory businesses had doubled from a year ago.
The second-quarter results continue the bank’s recent trend of beating profit expectations. In AprilThe bank posted a 10% increase in profits, its best quarterly performance since 2013.
It was also a busy day for European banks to announce their financial results, with Italy’s UniCredit maintain 14th consecutive quarter of profits Spanish Santander reported 20% Net profits soar.
