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Deutsche Bank warns of lower revenue
DEUTSCHE Bank AG warned that revenue will probably decline this year as a trading boost that lifted Wall Street banks in the first quarter fades and the coronavirus pandemic ripples through the economy.
The first quarter was flat from a year earlier as a 13 per cent increase in fixed-income trading helped offset lower income in the corporate bank and asset management, and the impact from a decision last year to exit equities trading. But with the pandemic shaping up to be more severe than anticipated, the bank warned that provisions for credit losses will "significantly increase" and suggested it may struggle to post a profit.
"As it relates to profitability, obviously this year will be tougher than we had initially assumed," chief financial officer James von Moltke said in an interview on Bloomberg TV. "But I will say relative to our planning we have obviously come into the year with a better first quarter step-off than we had anticipated."
Deutsche Bank joins firms including UBS Group AG in predicting there will be pain to come for banks as the trading rally fades and lockdowns to combat the virus drive up defaults.
The pandemic hits Germany's largest lender just as a turnaround plan announced last year by chief executive officer Christian Sewing was gaining traction. BLOOMBERG