Profits at Germany’s biggest lender Deutsche Bank AG tumbled in the third quarter, the group said yesterday, but its chief executive said the long-troubled institution was on its way back to profitability.
Net profit at the Frankfurt-based group fell 65 percent year-on-year between July and last month to 229 million euros (US$262.7 million), short of analysts’ forecasts of a 240 million euros bottom line.
The group highlighted a fatter operating, or underlying, profit of 506 million euros, but that figure was still 46 percent below the third quarter of last year.
Meanwhile, revenue shrank 9 percent to 6.2 billion euros.
“This result is another milestone on the way to becoming a sustainably profitable bank,” chief executive officer Christian Sewing said, promising a full-year result in the black for the first time since 2014.
After the departure of crisis-fighting chief executive John Cryan earlier this year, Sewing has heralded a new round of restructuring at Deutsche, slashing jobs and withdrawing from some far-flung financial market activities to focus more strongly on German and European business.
MOUNTING COSTS
The group reported restructuring and severance costs weighing on its bottom line to the tune of 103 million euros in the third quarter as it shrank its payroll by about 700 staff — with an aim for about 1,700 more departures by year’s end to reach 93,000 employees.
The group’s corporate and investment division reported shrinking revenue, but highlighted its leading role in many of the largest stock market flotations so far this year in Europe and Germany.
The retail banking arm reported that revenue was slightly down, even as it boosted lending to businesses and more people opened accounts at Deutsche’s Postbank AG subsidiary.
The group’s asset management business also reported lower revenue, blaming the effect on a one-off windfall in the third quarter of last year.
Mindful of past years when it was described as a threat to European and global financial stability, Deutsche highlighted a so-called “CET1” capital ratio — measuring its buffer to absorb potential losses — of 14 percent, slightly higher than the previous quarter.
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