Deutsche Bank shares surge 7% after net profit beats expectations

Finance

A logo stands on display above the headquarters of Deutsche Bank AG at the Aurora Business Park in Moscow, Russia.
Andrey Rudakov | Bloomberg | Getty Images

Deutsche Bank on Wednesday reported a third-quarter net profit of 1.031 billion euros ($1.06 billion), slightly beating expectations despite an 8% fall on the previous year and ongoing struggles in the lender’s investment unit.

Analysts had expected a quarterly net profit attributable to shareholders of 997 million euros, according to LSEG data.

Net profit was 35% higher on the prior quarter despite the year-on-year dip. It was Deutsche Bank’s thirteenth straight profitable quarter since its large-scale restructuring launched in 2019.

For the same period in 2022, the German lender recorded a net profit of 1.115 billion euros on the back of higher interest rates and increased market volatility that boosted its fixed income and currencies trading business.

The bank delivered a strong performance in its corporate banking business — which benefits from the higher interest rate environment — where revenues rose 21% year-on-year to 1.89 billion euros.

However, it continued to see a slowdown in its investment arm, where net revenues fell 4% year-on-year to 2.27 billion and are down 12% in the first nine months of the year to 7.3 billion.

Other highlights for the quarter:

  • Total revenues stood at 7.13 billion euros, up from 6.92 billion in the third quarter of 2022.
  • The provision for credit losses was 200 million euros, compared to 350 million in the same quarter of last year.
  • Common equity tier one CET1 capital ratio, a measure of financial resilience, was 13.9% versus 13.8% at the end of the second quarter and 13.3% in the third quarter of 2022.
  • Return on tangible equity stood at 7.3%, up from 5.4% the previous quarter.

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