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Deutsche Bank quarterly performance overshadowed by legal costs
[FRANKFURT] Deutsche Bank reported quarterly earnings largely in line with expectations but warned that challenges remained to cut costs, digest heavy legal charges and pare back its balance sheet in line with its new strategic plan.
The bank reported pretax profit of 1.2 billion euros in the second quarter, up 34 per cent on the year and just slightly below expectations. Litigation charges of an equal amount - 1.2 billion euros - burdened the group's bottom line.
The company said it may not reach its 2020 performance targets if litigation charges continue at the same pace as in years past. "Our challenges are also evident in the unacceptably high level of our costs, our continuing burden of heavy litigation charges, a balance sheet that must be more efficient, and the poor overall returns to our shareholders," new Chief Executive John Cryan said in a statement.
Deutsche was expected to post pre-tax profit of 1.28 billion euros in the quarter compared to 917 million euros posted one year earlier, according to a Reuters poll.