Deutsche Bank posts better-than-expected Q1 profit; flags job cuts
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Deutsche Bank generated earnings during an unsettling quarter when banks were rescued on both sides of the Atlantic – in the United States and in Switzerland.
PHOTO: REUTERS
FRANKFURT – Deutsche Bank reported a better-than-expected 9 per cent rise in first-quarter profit on Thursday as income from higher interest rates offset a slump in revenues at the investment bank. It also flagged job cuts as it looks to further reduce costs.
Net profit attributable to shareholders was €1.16 billion (S$1.7 billion). This compared with a profit of €1.06 billion a year earlier, and was better than analysts’ expectations of a profit drop to around €977 million.
The results marked the 11th consecutive quarter of profit at Germany’s biggest bank, making for the longest streak in the black in at least a decade.
“We are well on track to meeting or exceeding our 2025 targets,” Deutsche Bank chief executive Christian Sewing said.
It reported a 19 per cent drop in investment banking revenue that was worse than expectations. By contrast, revenue at the corporate bank and retail divisions beat expectations.
The bank said there would be an unspecified number of job cuts among non-client-facing staff as it seeks further cost reductions in the years ahead.
Deutsche generated the earnings during an unsettling period for global finance, a quarter when banks were rescued on both sides of the Atlantic – in the United States and in Switzerland. The turmoil caused investors to panic and customers to withdraw deposits, and the aftermath is continuing.
In the wake of those rescues, Deutsche suffered a 15 per cent decline in its share price during a single day as fears of contagion spread, spooking global markets and prompting rare support from German Chancellor Olaf Scholz. “There is no reason to worry,” he said. Shares have since stabilised.
Still, analysts say the bank, which ranks as one of the world’s most systematically important, is vulnerable to a slowing economy, high inflation and war on the continent, as well as regulatory issues that have plagued it over the years.
In recent days, Deutsche has announced a major revamp of its management board that includes changes to those overseeing its giant retail business and its US operations, a critical hub for the sprawling global investment bank.
The aim of the reshuffle, according to Deutsche chairman Alex Wynaendts, is “sustainable profitability”. REUTERS
