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Deutsche Bank Towers in Frankfurt: Flourishing capital market business in the crisis
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YANN SCHREIBER / AFP
Deutsche Bank reported a three-digit million profit for the third quarter despite the corona crisis.
Before taxes it was 482 million euros, after taxes it was 309 million euros, as the bank announced.
The shareholders of the Dax group still accounted for 182 million euros.
A year earlier, the group restructuring initiated in July 2019 had led to high losses.
In view of these surprisingly good figures, confidence is now growing at Deutsche Bank.
Despite the unprecedented economic downturn as a result of the Corona crisis, Germany’s largest bank was consistently profitable in 2020, CEO Christian Sewing said: "After nine months, our profit before taxes amounts to 846 million euros, so we are still confident that it will also be positive for the full year To achieve pre-tax profit. "
The institute, which is in the middle of a far-reaching restructuring, is doing better than the management had planned and analysts expected.
According to Sewing, the flourishing capital market business in particular helped Deutsche Bank achieve high profits.
"Our focused business model is paying off and we expect that a significant portion of our earnings growth will prove to be sustainable," he said.
The direction of the investment bank is bearing fruit.
Deutsche Bank is even prepared for another corona lockdown in Germany.
You will also manage this phase, said CFO James von Moltke.
Although the uncertainty has recently increased again, the restrictions in the second quarter showed that the banks were strong enough.
Despite the good numbers, Deutsche Bank shares plummeted on the stock exchange.
The shares fell at the top 5.1 percent to a two-week low of 7.51 euros.
They were then able to recover somewhat and were still 1.7 percent lower.
The Dax was up to 3.5 percent in the red.
"Actually, one would have expected the shares to rise, but the market as a whole is not enough," said one trader.
Some investors also apparently feared that the third quarter would remain a positive outlier and that the final quarter would no longer be such a positive surprise.
Austerity program continues: 18,000 jobs are to be cut
Deutsche Bank increased its income particularly strongly in the trading of bonds, currencies and interest rates as well as in the advisory and issuing business.
The income in the investment bank rose by 43 percent to 2.4 billion euros.
Overall, Deutsche Bank's third-quarter earnings increased 13 percent to 5.9 billion euros.
The costs fell by ten percent to 5.2 billion euros.
At the same time, the radical restructuring of the Deutsche Bank group is progressing after several years of losses.
Sewing wants to push costs down significantly and is aiming for a return on equity of eight percent for 2022.
He reaffirmed the goal of reducing costs to 19.5 billion euros for the full year, which would be 3.3 billion less than in 2018. To this end, the number of full-time positions in the group is to be reduced by around 18,000 to 74,000 worldwide by the end of 2022.
In the home market of Germany, the institute wants to cut every fifth branch and shrink the network to 400 locations.
Corona crisis weighs on lending business
The austerity measures initiated also contributed to the positive interim result, as did the fact that Deutsche Bank, at EUR 273 million, saved significantly less money for possible loan defaults than in the first two quarters.
Since the beginning of the year, the DAX group has put a good 1.5 billion euros in risk provisioning for endangered loans - more than three times as much as in the same period last year.
The corona crisis was particularly noticeable in the lending business.
Risk provisioning for bad loans increased by more than half to 273 million euros compared to the same period last year.
But that was a significantly lower volume than the 761 million euros posted in the second quarter.
Meanwhile, the listed fund subsidiary DWS continued to benefit from cost reductions and high cash inflows.
In the third quarter, their net profit climbed by 31 percent year-on-year to 151 million euros.
The total income of DWS at 558 million euros was slightly below the 560 million euros from the previous year, while the costs adjusted for special items fell by 12 percent to 342 million euros thanks to personnel savings.
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apr / dpa / Reuters