Deutsche Bank AG yesterday reported a 67 percent rise in second-quarter net profit as a result of stronger corporate and investment banking, more profitable securities trading and one-time charges that lowered results a year ago.
The Frankfurt-based bank said net profit for the second quarter increased to 1.1 billion euros (US$1.6 billion) compared with 645 million euros in the second quarter of last year.
Revenues for the second quarter increased 46 percent to 7.9 billion euros from 5.4 billion euros in the second quarter of last year, when revenues were hurt by 2.3 billion euros in write-downs.
The bank said the outlook for the remainder of the year hinged on how the global economy develops.
“Deutsche Bank turned in very satisfactory results,” chief executive officer Josef Ackermann said in a statement.
“The outlook for the remainder of 2009 is strongly influenced by progress in the global economy. In an uncertain environment, Deutsche Bank is well prepared. We have taken good advantage of improved conditions on financial markets, but we have also reduced costs and balance sheet risks, and strengthened our capital and liquidity base, all of which leaves us well-placed to confront near-term challenges,” Ackermann said.
Ackermann said the company had witnessed a stabilization of the world’s banking industry and financial markets and that increased liquidity and lower volatility were contributing to the bank’s more profitable business performance.
“Over the next few years, we expect the ‘flight to quality’ to continue, allowing Deutsche Bank to gain share due to their higher credit quality, superior technology and greater international reach,” Bernstein Research analysts wrote in a recent research note.
Deutsche Bank said its corporate banking and securities revenues were up 110 percent to 4.6 billion euros for the quarter, driven predominantly by revenues in sales and trading.
Revenues in the corporate investments division were up 123 percent to 660 million euros. The corporate and investment bank saw revenues increase 84 percent to 5.3 billion euros.
Meanwhile, global transaction banking, asset and wealth management, private clients and asset management and private business clients divisions all saw their revenues decline.
Deutsche Bank said it made provisions for credit losses of 1 billion euros during the quarter compared with 135 million euros in the second quarter of last year.
In the first six months of the year, the bank reported net income of 2.3 billion euros compared with 504 million euros in the first half of last year, a 356 percent increase.
For the first six months, the company reported group revenues of 15.2 billion euros, compared with 10 billion euros in the first half of last year, a 51 percent increase.