Deutsche Bank 2018 earnings of a group net income of €341m represents its first full year net profit since 2014.

In fiscal 2017 it posted a net loss of €735m.

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But a disappointing investment banking unit performance in the fourth quarter resulted in missed analyst forecasts.

In Q4 Deutsche Bank posted a net loss of €409m missing analyst forecasts.

Deutsche Bank 2018 earnings include a number of positive retail banking metrics.

Deutsche Bank 2018 earnings: highlights

The bank’s Germany based Private & Commercial Business revenues are up 2% at €1.6bn.The unit is boosted by growth in consumer and mortgage lending as well as smaller asset sale transactions offsetting continued deposit margin compression.

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Other highlights included attracting more than 3,000 new commercial (Mittelstand) clients during 2018.

The fourth quarter saw further progress in digital capabilities with the go-live of SEPA real-time transfers. The launch of Apple Pay resulted in a 7% increase in the number of Deutsche Bank-issued Mastercards within four weeks.

Deutsche Bank 2018 earnings do reveal progress on cost cutting with non-interest expenses down 5% year-on-year.
Workforce reductions met the bank’s 2018 target. Deutsche ends 2018 with 91,700 full time employees having targeted a reduction to 93,000 FTEs.

Christian Sewing, Chief Executive Officer, says: “Our return to profitability shows that Deutsche Bank is on the right track. Now, our priority is to take the next step. In 2019 we aim not only to save costs but also to make focused investments in growth. We aim to grow profitability substantially through the current year and beyond.”

Deutsche Commerzbank rumours

But Deutsche Bank is far from out of the woods. Rumours persist of a possible merger with German rival Commerzbank.

In 2018 Deutsche Bank’s share price fell by a whopping 53%. It ended 2018 with a market cap of only $17.2bn. Deutsche now barely makes it into the world’s largest 100 banks by market cap.

Analyst comment suggests that the German government will promote such a merger later this year if Deutsche Bank’s turnaround stalls.