Deutsche Bank Shares Soar as Net Profit Surpasses Forecast
Deutsche Bank has reported a 10% surge in its first-quarter net profit, fueling optimism among investors and sending its shares to a more than six-year high.
The German lender posted a net profit of 1.275 billion euros ($1.365 billion) for the three months ended March 31, exceeding analysts' expectations of 1.23 billion euros. This marks the bank's 15th consecutive quarterly profit and the highest first-quarter profit since 2013.
The positive results were attributed to growth in commissions and fee income, as well as strength in fixed income and currencies. The bank's investment banking unit, which had dragged down overall profit in 2023, rebounded with a 13% increase in revenue to 3 billion euros.
- Net profit attributable to shareholders: 1.275 billion euros ($1.365 billion)
- Analyst consensus forecast: 1.23 billion euros
- Revenue: 7.8 billion euros
- Revenue growth: 1% year-on-year
Strong Performance Across Business Segments
In addition to the robust performance of its investment bank, Deutsche Bank reported positive results across other business segments.
The Private Bank and Asset Management divisions saw net inflows of 19 billion euros, indicating strong client demand for the bank's wealth management and investment products.
The Corporate Bank, while lagging behind other segments, also contributed to the overall growth with a modest increase in revenue. The bank's credit loss provision declined from 488 million euros in the fourth quarter of 2023 to 439 million euros in the first quarter of 2024.
| Business Segment | Revenue Growth |
|---|---|
| Investment Banking | 13% |
| Private Bank | Net inflows: 19 billion euros |
| Asset Management | Net inflows: 19 billion euros |
| Corporate Bank | Modest increase |
Outlook and Analyst Reaction
Deutsche Bank's strong first-quarter performance has instilled confidence in investors and analysts alike.
Chief Financial Officer James von Moltke expressed optimism about the bank's momentum, stating that it is sustainable across all four of its business segments.
Analysts have praised the bank's investment banking recovery and highlighted its potential for continued growth. However, they have also noted the underperformance of the corporate bank and asset management divisions and the need for caution in the face of elevated credit losses.
- CFO James von Moltke: "There's momentum in the businesses, actually across all four businesses, and we do think it's sustainable."
- Keefe, Bruyette & Woods: "Reasonable" group results, strong investment bank figures, but underperformance in corporate bank and asset management divisions.
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