Deutsche Bank Q1 Results Rise; Stock Up

Deutsche Bank AG shares were gaining around 2 percent in the morning trading in Germany as well as in pre-market activity on the NYSE after the German banking major on Thursday reported higher profit and revenues in its first quarter. The company recorded highest quarterly profit before tax since 2013, and highest quarterly net revenues since 2016.

For the full year 2023, provision for credit losses is expected to remain within the previously communicated range of 25-30 basis points of average loans.

Christian Sewing, Chief Executive Officer, said, “Our first quarter results demonstrate the relevance of our Global Hausbank strategy to our clients and underscore that we are well on track to meeting or exceeding our 2025 targets. We aim to accelerate execution of our strategy through a number of measures announced today: raising our ambitions for operational efficiency, boosting capital efficiency to drive returns and support shareholder distributions, and seizing opportunities to outperform on our revenue growth targets.”

With the initiatives to accelerate Global Hausbank strategy, the company raised incremental savings ambition through operational efficiency to 2.5 billion euros from 2.0 billion euros through additional measures.

Further, the bank reaffirmed its commitment to distributions and said it is preparing to conduct further share buybacks later this year.

For Deutsche Bank’s Annual General Meeting on May 17, the Management Board and the Supervisory Board have formally proposed payment of a cash dividend of 0.30 euro per share in respect of 2022, up 50 percent from 2021.

For the first quarter, profit before tax grew 12 percent to 1.85 billion euros from last year’s 1.66 billion euros.

Net profit attributable to shareholders grew 9 percent to 1.16 billion euros from 1.06 billion euros a year ago. Earnings per share were 0.61 euro, up from 0.55 euro in the prior year quarter.

Provision for credit losses was 372 million euros in the quarter, up from 292 million euros last year, and 30 basis points of average loans.

Noninterest expenses were 5.5 billion euros, up 1 percent.

Net revenues grew 5 percent to 7.68 billion euros from 7.33 billion euros a year earlier. Net revenues were higher despite business exits as part of the bank’s transformation programme and challenging conditions in financial markets during the quarter.

The revenue growth was in line with bank’s revenue growth objectives through 2025 of between 3.5 percent and 4.5 percent.

In the quarter, Corporate Bank net revenues went up 35 percent year-on-year to 2.0 billion euros, the highest quarterly revenues since the launch of Deutsche Bank’s transformation programme, reflecting significant year-on-year growth across all regions and businesses.

Private Bank net revenues grew 10 percent from last year to 2.4 billion euros.

Meanwhile, Investment Bank net revenues fell 19 percent to 2.7 billion euros, mainly as fixed Income & Currencies revenues declined 17 percent. Origination & Advisory revenues were down 31 percent.

Asset Management net revenues also dropped 14 percent, primarily reflecting an 8 percent decline in management fees.

Net inflows of € 12 billion across the Private Bank and Asset Management

Post-tax return on average tangible shareholders’ equity was 8.3 percent, up from 8.1 percent in the prior year. The cost/income ratio improved to 71 percent, from 73 percent in the first quarter of 2022.

In Germany, Deutsche Bank shares were trading at 9.78 euros, up 2.30 percent.

In pre-market activity on the NYSE, the shares were trading at $10.83, up 1.79 percent.

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