Deutsche Bank smashes profit expectations in fourth quarter as higher interest rates bolster revenue

Deutsche Bank smashes profit expectations in fourth quarter as higher interest rates bolster revenue

Deutsche Bank on Thursday reported its tenth straight quarter of profit, receiving a lift from higher interest rates and favorable market circumstances.

Deutsche Bank reported a 1.8 billion euro ($1.98 billion) internet profit attributable to shareholders for the fourth quarter, bringing its annual internet earnings for 2022 to five billion euros, a 159% enhance from the earlier yr.

The German lender nearly doubled a consensus estimate amongst analysts polled by Reuters of 910.93 million euro internet profit for the fourth quarter, and exceeded a projection of 4.29 billion euros on the yr.

In 2019, Deutsche Bank launched a sweeping restructuring plan to cut back prices and enhance profitability, which concerned exiting its international equities gross sales and buying and selling operations, scaling again its funding banking and slashing round 18,000 jobs by the tip of 2022.

The annual end result marks a major enchancment from the 1.9 billion euros reported in 2021, and CEO Christian Stitching mentioned the the financial institution had been “successfully transformed” over the past three and a half years.

“By refocusing our business around core strengths we have become significantly more profitable, better balanced and more cost-efficient. In 2022, we demonstrated this by delivering our best results for fifteen years,” Stitching mentioned in an announcement Thursday.

“Thanks to disciplined execution of our strategy, we have been able to support our clients through highly challenging conditions, proving our resilience with strong risk discipline and sound capital management.”

Listed here are the opposite quarterly highlights:

  • Mortgage loss provisions stood at 351 million euros, in comparison with 254 million euros in the fourth quarter of 2021.
  • Frequent fairness tier 1 (CET1) ratio — a measure of financial institution solvency — got here in at 13.4%, in comparison with 13.2% on the finish of the earlier yr.
  • Complete internet revenue was 6.3 billion euros, up 7% from 5.9 billion euros for a similar interval in 2021, bringing the annual complete to 27.2 billion euros in 2022.

Deutsche’s company banking unit posted a 39% progress in internet interest earnings, aided by “higher interest rates, strong operating performance, business growth and favorable FX movements.”

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