Illustration shows the logo of Deutsche Bank Brussels, Saturday 25 March 2023.
Nicolas Maeterlinck | Afp |
Deutsche Bank on Thursday beat expectations on the bottom line and said it was on track to meet full-year targets, despite mixed results within its key investment banking unit and euro gains against the U.S. dollar.
Net profit attributable to shareholders reached 1.485 billion euros ($1.748 billion) in the second quarter, versus a 1.2 billion forecast from . It compares with a loss of 143 million euros in the June quarter of 2024, when earnings were hit by legal provisions linked to Deutsche Bank’s takeover of Postbank.
The lender’s revenues over the period came in at 7.804 billion euros, in line with a mean analyst forecast of 7.76 billion euros produced by LSEG.
In a statement accompanying the results, Deutsche Bank CEO Christian Sewing said the lender was “on track to meet our 2025 targets.”
Across the board, the bank noted an impact from the relative strength of the euro against the U.S. dollar.
Other second-quarter highlights included:
- Profit before tax of 2.4 billion euros, up 34% year-on-year.
- CET 1 capital ratio, a measure of bank solvency, was 14.2%, compared with 13.8% in the March quarter.
- Post-tax return on tangible equity (ROTE) rate of 10.1%, from 11.9% in the previous quarter.
The firm’s core investment banking unit reported a 3% year-on-year uptick in revenue to 2.7 billion euros in the June quarter, but reported mixed results at its subdivisions.
In fixed income and currencies, the bank posted a “strong” 11% revenue bump driven by higher net interest income in financing and increased volatility and client activity in foreign exchange. But Deutsche Bank’s origination and advisory division — which deals with relationships with major corporates and sovereign institutions — logged a second-quarter revenue decline of 29% to 416 million euros, citing “market uncertainty” and weaker debt origination.
Corporate banking revenues, meanwhile, dipped by 1% on the year to 1.896 billion euros in the second quarter.
European banks overall are facing the challenge of navigating a lower interest rate environment, with the European Central Bank most recently bringing its key interest rate down to 2% in June and expected to hold that monetary policy during its meeting later in the Thursday session.
Domestically, the tumult that gripped German politics at the end of last year has quietened after snap elections awarded stewardship to a new ruling coalition under Chancellor Friedrich Merz. But the European Union’s largest economy — and the third largest exporter globally — is now mired in trade uncertainty as the 27-nation bloc races to agree a tariff deal with U.S. President Donald Trump by an Aug. 1 deadline.
“If tariffs materialise in August, a recession in Germany in 2025 cannot be ruled out,” Bundesbank President Joachim Nagel said last week, according to .
This breaking news story is being updated.