The net profit of the largest German banking company, Deutsche Bank, decreased by 27 percent year-on-year to 763 million euros in the second quarter. The company stated this in a press release today. The drop in profit was due to the high costs of company reorganization and legal disputes. But the net profit exceeded the expectations of analysts, who, according to Reuters, estimated it at about 571 million euros.
The company’s gross profit in the second quarter fell by nine percent year-on-year to 1.4 billion euros.However, excluding extraordinary costs, it increased by 25 percent and reached 2.1 billion euros.
At the same time, Deutsche Bank downgraded the investment banking division’s outlook. It warned that it would have to move further to cut costs, even though the income of the retail banking division was supported by rising interest rates.
“We have identified further concrete steps to improve operational performance at all levels. I am aware that this means making some tough decisions, but we are in an environment with significantly rising prices, which is another reason why we have to maintain strict cost discipline,”said company boss Christian Sewing.
Deutsche Bank’s results are in line with broader trends in the global banking sector, in which investment banking is struggling with a decline in mergers and acquisitions while other banking activities benefit from higher interest rates.
Deutsche Bank’s investment banking revenue fell 11 percent in the second quarter, while retail banking revenue rose 11 percent. The retail banking division thus became the company’s largest source of income in the second quarter.
However, a Reuters source said last month that Deutsche Bank intends to cut about ten percent of the 17,000 jobs in the German part of its retail banking division in the coming years.
Source: CTK
