Deutsche Bank Q3 Profit Climbs, Confirms Outlook; Stock Dips

German banking major Deutsche Bank AG reported Wednesday higher profit in its third quarter, driven by partial release of Postbank litigation provisions, lower expenses, as well as improved revenues. The company also said it is on track to achieve its annual revenue target, as well as 2025 goals.

Meanwhile, Deutsche Bank shares were losing around 3 percent in the morning trading in Germany as well as in the pre-market activity on the NYSE.

James von Moltke, CFO, said, “… we will meet our 30 billion euros revenue guidance for the year 2024 and that our continued revenue momentum, cost efficiencies, capital strength and moderating credit provisions all put us on track to deliver on our 2025 goals.”

Deutsche Bank further said it recently sought ECB authorization for further share repurchases.

In its third quarter, the company reported net income attributable to shareholders of 1.46 billion euros, 42 percent higher than 1.03 billion euros last year.

The latest earnings were benefited by around 440 million euros partial release of litigation provisions relating to the bank’s takeover of Postbank AG, combined with operating momentum.

Excluding Postbank-related litigation release, net profit moved up by 8 percent to 1.3 billion euros from last year’s 1.2 billion euros.

Profit before tax rose 31 percent to 2.26 billion euros from prior year’s 1.72 billion euros. Adjusted pre-tax income was 1.8 billion euros, up 6 percent from the prior year.

In the quarter, non-interest expenses dropped 8 percent to 4.744 billion euros, while it was flat ex-Postbank litigation release. Provision for credit losses, however, surged to 494 million euros from last year’s 245 million euros.

Total net revenues for the quarter were 7.501 billion euros, up 5 percent from previous year’s 7.132 billion euros.

The company recorded 5 percent growth in commissions and fee income to 2.5 billion euros, reflecting strong performance of fee and commissions-based businesses.

Net interest income in the key segments of the banking book was broadly stable year on year.

Corporate Bank net revenues were 1.8 billion euros, down 3 percent, and net interest income was 1.2 billion euros, down slightly year on year, reflecting normalizing deposit margins.

Investment Bank net revenues were 2.5 billion euros, up 11 percent over last year, with growth across both Fixed Income and Currencies and Origination & Advisory. Emerging Markets revenues were also significantly higher, reflecting growth across regions.

Private Bank net revenues of 2.3 billion euros were essentially flat year on year, while net interest income declined 6 percent in an environment of stabilizing interest rates.

Asset Management net revenues were up 11 percent from last year to 660 million euros.

On XETRA, Deutsche Bank shares were trading at 15.88 euros, down 2.65 percent.

In pre-market activity on the NYSE, the shares are at $17.10, down 2.68 percent.

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