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Summary
- Deutsche Bank reports net profit of EUR908 million – best in 7 years
- Investment banking propels 14% growth in the revenues
- Lesser expenses, provisions help the bank
Following in the footsteps of its Wall Street peers, German multinational investment bank and financial services company, Deutsche Bank (ETR: DBK) has delivered its best quarterly show in seven years (28 quarter). The blockbuster results came on the back of the global deal making boom.
The banking major on Wednesday reported a net profit of EUR908 million for first quarter ended March 2021, an impressive upturn compared with a loss of EUR43 million in the year ago period.
Led by the growth in the investment banking division topline, the revenues of the bank grew by 14% in the quarter to EUR7.23 billion, compared with EUR6.35 billion in the corresponding period last year.
As deal making across the globe picked up, the investment banking division of the bank mopped up EUR3.1 billion revenues, up 32% from EUR2.35 billion a year ago.
“The Investment Bank continued to benefit from our refocused business model, with another strong performance in FIC and market share gains in Origination and Advisory,” the bank’s CEO Christian Sewing noted.
The performance of the bank was further enhanced by the lesser provisions for credit losses. The bank provided only EUR69 million for credit losses in the quarter, down 86% compared with EUR506 million in the corresponding quarter last year.
“We also saw an unexpected market event which led to an additional contribution of EUR28 million to the German statutory deposit guarantee scheme in the quarter,” bank’s CFO James von Moltke said in the earnings call.
The bank also reduced its non-interest expenses by 1% to EUR5.57 billion, helping in its profitability.
Despite its exposure, the bank has been able to manage the hit from the blow-up of US hedge fund Archegos Capital, which saw its peers UBS, Credit Suisse, Morgan Stanley, and several others take significant one-time losses in the first quarter.
Also Read: Morgan Stanley net profits surge 150% in Q1
The shares of the bank closed at EUR10.19 per scrip on Tuesday in Frankfurt.
