Deutsche Bank Quarterly Profit Down, Cuts FY Revenue View

by Ike Obudulu Posted on April 29th, 2019

German banking giant Deutsche Bank AG (DB) reported lower pre-tax profit in its first quarter with weak net revenues. Net profit, however, increased from last year with lower tax expenses. The German banking major, which ended merger talks with smaller rival Commerzbank AG on Thursday, trimmed its fiscal 2019 view to expect flat revenues, compared to previous estimate of slightly higher revenues. The shares were losing around 3 percent in German trading.

Christian Sewing, Chief Executive Officer, said, “We have made progress on key business drivers: growth in loans and deposits, a recovery in assets under management and market share improvements in corporate finance. Our continued cost discipline helped us to offset lower revenues and we are well on track to meet our 2019 cost target of 21.8 billion euros.”

For the first quarter, profit before income tax fell 32 percent to 292 million euros from last year’s 432 million euros. The decline reflected bank levy charges of 604 million euros in respect of the full year 2019 that was taken in the latest quarter.

Group net income surged 67 percent to 201 million euros from 120 million euros in the prior year.

Net revenues for the quarter declined 9 percent to 6.35 billion euros from 6.98 billion euros last year. Adjusted for specific items, net revenues were down 5 percent.

Revenues in Corporate & Investment Bank or CIB fell 13 percent from last year to 3.33 billion euros. Private & Commercial Bank or PCB revenues dropped 5 percent to 2.51 billion euros. Asset Management revenues also declined 4 percent reflecting lower assets under management due to outflows in 2018 and market declines in the fourth quarter of 2018.

Revenues in Global Transaction Banking, however, went up 6 percent.

Provision for credit losses was 140 million euros in the quarter, up 60 percent year-on-year.

Total non-interest expenses were 5.92 billion euros, down 8 percent. Adjusted costs were down 7 percent, which substantially offset a challenging revenue environment.

In Germany, Deutsche Bank shares were trading at 7.25 euros, down 3.04 percent.

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