FRANKFURT: Deutsche Bank, Germany’s biggest lender, said Thursday that its profits were more than halved in the first quarter as the slowing global economy weighed on client activity.
But the bank’s first-quarter performance still largely beat analysts’ expectations.
Deutsche Bank said in a statement that net profit fell to 214 million euros ($243 million) in the period from January to March, down from 544 million euros a year earlier.
That represented a drop of 58 percent, but analysts had been pencilling in a bottom-line loss for the bank in the three-month period.
Underlying or operating profit plunged by 60 percent to 579 million euros on a 22-percent drop in revenues to 8.1 billion euros.
“Financial markets were challenging during the first quarter, largely reflecting concerns about the outlook for the global economy,” said chief executive John Cryan.
“This uncertainty led to a decline in client activity in the capital markets, and our revenues fell from the prior year, most notably in our trading and corporate finance businesses,” he said.
“Our results reflect these challenging conditions as well as the impact of our strategic decisions to exit or reduce significantly selected businesses,” Cryan continued.
The CEO nevertheless insisted that the bank had made progress on a number of fronts including the modernisation of its IT platforms,
The operational separation of Deutsche Postbank was “almost complete,” he said.
Deutsche Bank was pressing ahead with the disposal of non-core assets “and the ongoing closure or downsizing of our operations in selected countries.”
Cryan said that 2016 would mark “the peak year for our restructuring efforts.”
The stake in China’s Hua Xia Bank would be completed in the second quarter, helping to strengthen the bank’s core capital ratio.
“We continue to upgrade our technology, strengthen our control environment, and work towards resolving outstanding litigation matters,” the CEO added.
Deutsche Bank is currently entangled in a web of legal woes, facing as many as 6,000 different litigation cases, the provisions for which helped push it to a record loss of 6.8 billion euros last year.
In a newspaper interview the day before, co-CEO Juergen Fitschen had said that the bank was hoping to settle some of the major lawsuits by the end of this year.
Copyright AFP (Agence France-Presse), 2016
Courtesy : BRecorder