Deutsche Bank posts best Q3 profit in 16 years

Deutsche Bank reported its highest third-quarter profit in 16 years on Wednesday, with its profit before tax for the period coming in at €1.6bn.

The German banking giant said its post-tax profit rose more than threefold year-on-year to €1.2bn, while its post-tax return on tangible equity was 8.2%, up from 1.5%.

Its cost-to-income ratio declined to 72 from 89% in the prior-year quarter, while net revenues rose 15% to €6.9bn, with growth in all of its core businesses.

The corporate bank was up 25% to €1.6bn, the investment bank was ahead 6% to €2.4bn, the private bank rose 13% to €2.3bn, asset management added 1% to €661m, and non-interest expenses were down 8% year-on-year, at €5bn.

Adjusted costs, excluding transformation charges and bank levies, were up 4% to €4.8bn, or down 1% year-on-year when adjusted for foreign exchange movements.

Core bank pre-tax profit more-than-doubled to €1.8bn, with a post-tax return on tangible equity of 9.9%, up from 3.9% in the prior-year quarter.

The core bank’s cost-to-income ratio improved to 68%, from 83%.

In the capital release unit, Deutsche described further de-risking and cost reduction in the quarter, with its leverage exposure reduced to €25bn from €29bn.

Its non-interest expenses fell 33% year-on-year to €208m, and the group’s common equity tier 1 (CET1) ratio was 13.3%, up from 13% in the second quarter.

“In the third quarter and first nine months of 2022, we delivered our best profits in more than a decade for both these periods,” said chief executive officer Christian Sewing.

“This underlines the success of our transformation efforts.”

Sewing said the company “significantly improved” its earnings power, and was “well on track” to meet its 2022 goals

“This reflects the outstanding efforts of our people.

“We have the strength to stand by our clients in a more challenging environment while growing returns to our shareholders.”

At 1308 CEST (1208 BST), shares in Deutsche Bank Aktiengesellschaft were down 0.69% in Frankfurt, at €9.20.

Reporting by Josh White for Sharecast.com.