Deutsche Bank has reported its highest quarterly Group profits in seven years. Profit before tax was € 1.6bn for the first quarter of 2021, up from € 206m in the first quarter of 2020.
Net profit was € 1.0bn, compared to € 66m in the prior year quarter.
The result was driven by revenue growth, a substantial reduction in provision for credit losses, and lower adjusted costs year on year, the Frankfurt-based bank said.
Core Bank profit before tax of € 2.0bn, more than double the prior year quarter’s, driven by significant profit growth across all core businesses.
Specifically: Corporate Bank: up 90% to € 229m. Investment Bank: up 134% to € 1.5bn. Private Bank: up 92% to € 274m. At the same time, Asset Management grew 66% to € 183m.
Germany’s biggest lender exceeded analyst expectations for net income of €642.95, according to market data provider Refinitiv. The bumper crop quarter is Deutsche’s best since the first three months of 2014.
“On the right path in all four core businesses”
“Our first quarter is further evidence that Deutsche Bank is on the right path in all four core businesses, and is building sustainable profitability,” said Christian Sewing, Chief Executive Officer.
“In addition to substantial revenue growth over an alreadystrong prior year quarter, we demonstrated cost and risk discipline. We achieved a post-tax return on tangible equity of above 7%, and returns in the Core Bank are already ahead of our ambition for next year.
“These results give us confidence that we’ll reach our 2022 targets.”
Significant improvement in provision for credit losses. This amounted to a net release of € 20m in the quarter, compared to a provision of € 106m in the prior year quarter.
This development was driven by releases due to an improving macroeconomic outlook and releases of provisions on specific exposures.
A re-engineering that has paid off
Two years ago, the German multinational embarked on a major restructuring, predicting 8,000 jobs cut by 2022. It set out to close its global equities sales and trading business in a bid to improve profitability.
Deutsche Bank swung to a small annual profit in 2020, its first since 2014, on the back of strong gains at its investment banking division.