Deutsche Bank AG, a leading German financial institution, announced on Wednesday that its third-quarter profits have risen, buoyed by the partial release of legal provisions associated with its acquisition of Postbank, reduced expenses, and increased revenues. The bank is confident it will meet its annual revenue objectives as well as its targets set for 2025.
Despite the positive financial results, Deutsche Bank's shares experienced a decline of approximately 3 percent during morning trading in Germany and similarly in pre-market trading on the NYSE.
Chief Financial Officer James von Moltke stated, "We are set to achieve our revenue target of 30 billion euros for 2024, and our ongoing revenue growth, cost efficiency initiatives, strong capital base, and controlled credit provisions position us well to meet our 2025 goals."
Additionally, Deutsche Bank disclosed that it has recently requested authorization from the European Central Bank to proceed with further share repurchases.
In the third quarter, the bank reported a net income attributable to shareholders of 1.46 billion euros, a 42 percent increase from last year's 1.03 billion euros. This impressive earnings growth was partly due to a partial release of approximately 440 million euros in legal provisions related to the Postbank acquisition, coupled with solid operational performance.
Excluding the litigation-related release concerning Postbank, the net profit saw an 8 percent increase to 1.3 billion euros from last year's 1.2 billion euros.
Profit before tax climbed 31 percent to 2.26 billion euros, up from 1.72 billion euros in the previous year, while adjusted pre-tax income rose to 1.8 billion euros, representing a 6 percent increase from last year.
For the quarter, non-interest expenses decreased by 8 percent to 4.744 billion euros. When excluding the Postbank litigation release, expenses remained stable. However, the provision for credit losses surged to 494 million euros from the previous year's 245 million euros.
Total net revenues for the quarter amounted to 7.501 billion euros, marking a 5 percent rise from last year’s 7.132 billion euros. The company achieved a 5 percent increase in commissions and fee income to 2.5 billion euros, reflecting the robust performance of its fee and commission-based operations.
Net interest income across crucial segments of the banking portfolio remained largely unchanged year on year.
Corporate Bank net revenues dropped 3 percent to 1.8 billion euros, with net interest income slightly declining to 1.2 billion euros, influenced by normalizing deposit margins.
In contrast, Investment Bank net revenues increased by 11 percent to 2.5 billion euros, propelled by growth in both Fixed Income and Currencies as well as Origination & Advisory. Additionally, revenues from Emerging Markets showed significant improvement, indicating growth across various regions.
Private Bank net revenues were stable at 2.3 billion euros compared to the previous year, although net interest income decreased by 6 percent amid an environment of stabilizing interest rates.
Asset Management net revenues experienced an 11 percent increase from the prior year, reaching 660 million euros.
During trading on XETRA, Deutsche Bank shares were priced at 15.88 euros, reflecting a 2.65 percent decrease. On the NYSE, pre-market trading saw shares at $17.10, down 2.68 percent.
