October 5, 2022

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Deutsche Bank earnings in the first quarter of 2022

Deutsche Bank earnings in the first quarter of 2022

German Bank On Wednesday it reported its seventh consecutive quarterly profit, but cautioned that the current environment is “challenging” and “cost pressures have intensified.”

The German bank said its net profit was 1.06 billion euros ($1.13 billion) in the first quarter. Analysts expected a figure of 1.01 billion euros for the three-month period, according to Refinitiv data.

“Deutsche Bank is more stable and resilient than it has been for many years. Our numbers for the first quarter clearly state that,” CEO Christian Swing said in a letter to employees on Wednesday. But the German bank indicated in its earnings report that the outlook for this year was difficult.

“Despite the uncertainties associated with the war in Ukraine and the remaining challenges associated with the COVID-19 pandemic, we intend to continue implementing our strategy in a disciplined manner with a focus on improving sustainable profitability by increasing revenue in our core bank while maintaining discipline in costs and capital, but the environment The current is getting tougher, and cost pressures have intensified.”

Rising inflation and how central banks can react to it has shaken the markets of late, and caused great uncertainty for businesses including banks. A sudden change in monetary policy may affect the performance of banks.

wall of worries

“It’s a wall of concerns right now,” James von Moltke, chief financial officer of Deutsche Bank, told CNBC’s Annette Weisbach.

“There are a number of different features there and of course the war in Ukraine dominates because it dominates the news, but it should not overshadow that there are still some pressures whether it is supply chains, the Chinese reaction to Covid and other features,” she said.

Other highlights of the quarter:

  • Revenue rose 1% from last year to 7.33 billion euros.
  • Provisions for credit losses amounted to 292 million euros, compared to 69 million euros a year earlier.
  • Europe’s Tier 1 capital ratio, a measure of banks’ solvency, was 12.8%, down from 13.7% a year earlier.

All divisions of Deutsche Bank performed better than last year. In investment banking, fixed income and currencies reported a 15% rise in revenue.

Commenting on the results, von Moltke added that “these trends are likely to continue into the second quarter.”

“There is still uncertainty in the financial markets and some volatility out there, and our goal is to support our clients in this environment,” he said.

Exposure to Russia

On March 11 German Bank It said it would end its operations in Russia – a significant shift compared to its initial position as War broke out in Ukraine. The German bank said it was joining a group of international peers in getting out of the country in response to its invasion of Ukraine and the resulting operational restrictions.

As such, Deutsche Bank said it reduced its exposure to Russia during the first quarter. Gross loan exposure decreased 5% to €1.3 billion and net loan exposure decreased 21% to €0.5 billion during the quarter. It also said it was “implementing without reservation” Western sanctions against Russia.

German lender Surprised the markets at the end of 2021 With a profit of 145 million euros when investors estimated a net loss for the fourth quarter of the year. Shares are down about 6.6% since the start of the year.

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