Deutsche Bank, Germany’s biggest lender, yesterday reported a bottom line in the black for the first time in four years for last year, with a cost-cutting drive delivering results even as revenues fell.
The firm reported 267 million euros (US$305.68 million) net profit, compared with a loss of 751 million in 2017.
The result was short of expectations of 505 million euros from analysts surveyed by Factset.
Pretax profits at the firm were up 8 percent year-on-year at 1.3 billion euros.
However, revenues fell four percent, to 25.3 billion euros, with Deutsche blaming a fourth quarter marked by “challenging financial markets” and “negative” headlines, including a raid by prosecutors on the bank’s Frankfurt headquarters in November last year.
Between October and December, the firm reported a net loss of 425 million euros.
Nevertheless, “our return to profitability shows that Deutsche Bank is on the right track,” chief executive Christian Sewing said in a statement, adding that he aims to “grow profitability substantially” this year.
Sewing was named CEO early last year, after the bank struggled for years to escape financial woes and a thicket of legal entanglements dating back to the years before the 2008 financial crisis.
He has launched a new round of restructuring to focus on the German home market, cut costs and slash the headcount.
Almost 6,000 departures last year brought the payroll down to 91,700, while the bank reduced costs 5 percent to 23.5 billion euros.
The bank’s turnaround might not be advancing quickly enough for some shareholders and the German government, which has said that it wants strong lenders to support the country’s firms in their international business.
Bloomberg News on Thursday reported that executives’ talks with Berlin over a possible merger with partially state-owned rival Commerzbank have “intensified” over the past few months.
In the bank’s different divisions, operating profit at the retail and commercial banking unit was roughly flat, while the flagship corporate and investment banking unit tumbled 8 percent.
There was a steeper fall for the smaller asset management arm, whose profits shed 14 percent.
Deutsche added that by the end of the year, it had “wholly or partially resolved 19 of the 20 most significant” looming legal risks identified in 2016, with 1.2 billion euros of provisions set aside for litigation costs.
The group this year aims to cut costs to 21.8 billion euros, compared with a previous target of 22 billion, while shrinking its workforce to “well below” 90,000.
In financial terms, Deutsche Bank is to target a return on tangible equity of 4 percent, compared with 0.5 percent last year, it said.
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to