Deutsche Bank posts Q1 23 profit before tax of €1.9bn, up 12% y-o-y, its best quarterly result since 2013. Meantime, net profit rises by 8% to €1.3bn. Net revenues rise by 5% to €7.7bn, its best result since 2016 despite business exits during its ongoing transformation programme.
On the other hand, Deutsche Bank warns of further job cuts to come. Specifically, the bank is implementing additional efficiency measures across the front office and infrastructure.
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These include strict limitations on hiring in non-client facing areas and focused reductions in management layers. It also plans to streamline its mortgage platform and further downsize of the bank’s technology centre in Russia.
In addition, negative metrics include a worse than expected result in investment bank revenues, down by 19% y-o-y.
And on expenses, while the cost-income ratio is down by 2 percentage points, it remains an unacceptably high 71%.
Deutsche Bank Q1 2023 highlights
Private Bank net revenues of € 2.4bn, rise by 10% year on year. This is driven by strong net interest income. Revenues in the Private Bank Germany are up by 14% y-o-y. International Private Bank grew revenues rise by 3%. Net inflows are € 6bn during the quarter, driven by inflows into investment products.
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By GlobalDataCorporate Bank net revenues rise by 35% y-o-y to € 2.0bn up 35%. This represents the highest quarterly revenues since the launch of Deutsche Bank’s transformation programme. It also reflects significant year-on-year growth across all regions and businesses. Growth was driven by year-on-year growth of 71% in net interest income and continued pricing discipline. Fee income rose 1% year on year. Revenues in Corporate Treasury Services increase by 32%. Institutional Client Services revenues are ahead by 28% and Business Banking revenues are up 59%.
“In the first quarter, we again proved the strength and resilience of Deutsche Bank in challenging conditions,” said James von Moltke, Chief Financial Officer. “We have delivered well-balanced earnings and growth momentum across four complementary businesses. And we have attracted inflows into investment products and demonstrated balance sheet strength. Our capital and liquidity ratios were stable or improved during the quarter, each significantly ahead of regulatory requirements. And we benefited from the resilience of our funding base, anchored by our strong and well-diversified deposit base.”
