Deutsche Bank Q3 net profit down 8%, but better than expected
DEUTSCHE Bank posted an 8 per cent drop in third-quarter profit, not as steep as analysts had expected, as revenue at the investment bank slumped but grew at the retail and corporate divisions on the back of higher interest rates, figures on Wednesday (Oct 25) showed.
Net profit attributable to shareholders was 1.031 billion euros (S$1.5 billion). That compares with a profit of 1.115 billion euros a year earlier and is better than analyst expectations for a profit of around 937 million euros.
The bank was slightly more optimistic on its revenue outlook for the full year, now anticipating around 29 billion euros.
The figures underscore trends in global banking emerging from a slew of mixed earnings reports that have shown investment banks struggling – with deal activity muted and trading sluggish – while higher interest rates prove a boon to other divisions.
Though profit dropped, the earnings at Germany’s largest bank mark the 13th consecutive quarter of profit, a considerable streak in the black after years of hefty losses.
But the earnings come as the investment bank faces uncertain business prospects in the coming quarters and as the retail division draws the scorn of regulators after it botched the integration of its Postbank arm, leaving customers complaining that they were locked out of their accounts and unable to reach call centres.
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“These results demonstrate strong and sustained business growth momentum combined with continued cost discipline,” Deutsche Bank chief executive officer Christian Sewing said.
The bank’s retail business was again the biggest revenue generator during the quarter.
Analysts expect the retail unit, which is undergoing a strategy review under new leadership, will overtake the investment bank as the main revenue driver for the full year, overturning the investment bank’s pole position over the previous three years.
Investment banking revenue dropped 4 per cent during the quarter, better than an expected 5 per cent drop. A 21 per cent increase in revenues at the corporate bank slightly beat expectations and the retail division’s 3 per cent rise came in below forecasts of 5 per cent. REUTERS
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