Deutsche Bank 2021 with a surplus in the billions – highest profit in ten years
Created: 2022-01-27Updated: 2022-01-27, 09:00
Deutsche Bank reported record profit in 2021.
© Hauke-Christian Dittrich/dpa
Deutsche Bank closed the past year better than expected.
Even a dividend for the shareholders is possible again.
Frankfurt - Deutsche Bank ended 2021 with a net profit for the second year in a row after a series of losses.
The bottom line - i.e. after deduction of interest payments for subordinated bonds - was a profit of 1.94 billion euros after 113 million euros a year ago, as the bank announced on Thursday.
The expectations of the analysts were thus clearly exceeded.
Profits nearly tripled in the fourth quarter.
In 2021, the bank achieved its best result in ten years, said CEO Christian Sewing.
"The progress made in our transformation and our results in 2021 are a good basis to achieve our goal of an eight percent return on equity in 2022."
Deutsche Bank plans dividend again
After a long dry spell, shareholders are to receive a dividend again.
They were promised 20 cents per share for 2021.
The last time the institute paid a dividend was for the 2018 financial year, at that time it was eleven cents.
The Frankfurt money house also announced that it would buy back its own shares for 300 million euros in the first half of 2022.
The dividend plans are a sign that the conversion course initiated by Sewing is bearing fruit and that the bank has returned to a more stable profit path.
"All four businesses are performing as planned or even better, and we have progressed faster than expected in reducing legacy inventory," said Sewing.
He initiated a comprehensive reorganization in the financial group in mid-2019.
In the course of this process, entire departments were closed, risky parts of investment banking were sold and tough cost-cutting measures were taken.
Around 18,000 jobs are to be lost worldwide as part of the conversion.
The conversion-related costs were 1.5 billion euros in 2021, an increase of 21 percent compared to the previous year.
This means that 97 percent of all effects expected by the end of 2022 have already been processed, the bank explained.
Deutsche Bank: Strong investment banking
Group earnings rose last year by six percent to 25.4 billion euros.
As with other institutions, investment banking was once again a key source of income.
Germany's largest bank in the issuing and consulting business benefited from the global merger and takeover fever last year.
In the home market of Germany, the money house has regained its position as market leader in 2021.
Overall, revenue in the investment bank increased by four percent in 2021.
But the financial group also increased its earnings slightly in private customer business, while they remained stable in the corporate bank.
Support was also provided by the fact that the corona pandemic had less of an impact on business than had been feared.
Loan loss provisions fell by 71 percent to EUR 515 million in 2021.
The bank's CET1 capital ratio was 13.2 percent at the end of 2021 after 13.6 percent a year earlier.
In a letter to employees, Sewing pointed to growing customer interest in ESG products.
By the end of the year, the bank had enabled 157 billion euros in sustainable financing and investments.
"This means that we will probably be able to reach our goal of at least 200 billion euros as early as 2022 and not only at the end of 2023," he wrote.