Deutsche Bank's Q3 Net Profit Declines 8% But Exceeds Expectations

Deutsche Bank has reported a third-quarter net profit of 1.031 billion euros ($1.06 billion), surpassing expectations despite an 8% decline compared to the previous year and ongoing challenges in the bank's investment unit.

Analysts had anticipated a quarterly net profit of 997 million euros, according to data from LSEG.

The net profit for the quarter was 35% higher than the previous quarter, despite the year-on-year decrease. This marks the thirteenth consecutive profitable quarter for Deutsche Bank since its major restructuring in 2019.

In the same period in 2022, the German bank had recorded a net profit of 1.115 billion euros, benefiting from higher interest rates and increased market volatility, which boosted its fixed income and currencies trading business.

Deutsche Bank's corporate banking division performed well, with a 21% year-on-year increase in revenues to 1.89 billion euros, benefiting from the higher interest rate environment.

However, the investment arm continued to experience a slowdown, with net revenues falling 4% year-on-year to 2.27 billion euros and a 12% decline in the first nine months of the year to 7.3 billion euros.

Deutsche Bank's CFO, James von Moltke, noted that the investment banking unit's performance is in line with market expectations. He explained that there has been a shift in the bank's focus toward other products, particularly credit and financing, which have shown strength.

Other key points for the quarter include total revenues of 7.13 billion euros (up from 6.92 billion in the third quarter of 2022), a provision for credit losses of 200 million euros (compared to 350 million in the same quarter of the previous year), a common equity tier one CET1 capital ratio of 13.9% (compared to 13.8% at the end of the second quarter and 13.3% in the third quarter of 2022), and a return on tangible equity of 7.3% (up from 5.4% in the previous quarter).