Despite the difficult economic environment, Deutsche Bank achieved a surprisingly high billion-dollar profit in the third quarter. Before taxes, the institute earned around 1.6 billion euros – almost three times as much as a year earlier and as much as not since 2006, as Germany’s largest private financial institution announced on Wednesday in Frankfurt. The bottom line is that the shareholders made a profit of a good 1.1 billion euros, almost six times as much as in the same period last year. Analysts had expected significantly less on average. Above all, higher interest rates gave the institute a boost.
“Deutsche Bank is on course to achieve its goals for 2022,” said CEO Christian Sewing. The manager continues to expect a return of eight percent on tangible equity, which analysts previously considered unrealistic. In the first nine months, this figure was 8.1 percent. A year earlier it had only reached 4.8 percent.
growth in all areas
Earnings – that is, the bank’s total income – rose in the third quarter by 15 percent to 6.9 billion euros. All core business areas contributed to the growth. In the first nine months, revenues climbed 7 percent to 20.9 billion euros. The continued good business development opens up the possibility of exceeding the previous forecast for group earnings of 26 billion to 27 billion euros for the full year 2022, the institute announced. Deutsche Bank benefited primarily from higher interest rates. In addition to net interest income, income from trading in fixed-income securities in particular also surged.
“With these results, we are continuing the positive trends of the past quarters,” Sewing wrote in a letter to employees. With the solid balance sheet, “we feel very well prepared for what lies ahead”. In view of the looming recession, the bank set aside 350 million euros for non-performing loans in the third quarter – around three times as much as a year earlier. The institution also reduced its exposure to Russia.
In the first nine months, consolidated profit after deduction of interest payments to the holders of subordinated bonds increased by 80 percent to 3.2 billion euros. The nine-month profit before tax was 4.8 billion euros, the highest in eleven years.
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