The Deutsche Bank AG flag flies outside the company’s office on Wall Street in New York.
Marc Kauzlarich | Bloomberg | Getty Images
Deutsche Bank on Thursday beat employment expectations for 2020 as it emerged from a coronavirus crisis, driven by strong performance in its investment banking sector.
Germany’s largest lender posted a full-year net profit of 113 million euros ($ 135.7 million), but analysts expected a loss of 201 million euros, according to Refinitiv. Deutsche reported a loss of 5.7 billion euros for 2019 due to a major restructuring.
The bank filled a profit of 51 million euros for the fourth quarter, compared to analysts’ expectations of a loss of 325 million euros.
Higher revenues and cost reductions helped Deutsche’s investment banking division perform well, with net income rising 32% to 9.8 billion euros in 2020. This was “in addition to correcting an increase in provision for credit losses due to COVID-19, “the bank said in a statement.
The bank’s CFO, James von Moltke, told CNBC shortly after the news that he had achieved all his goals for the year. He noted that while the investment bank was the strongest area of business, both the corporate and private banks had been correcting the “headwinds” from low interest rates, while the regulatory industry assets have seen an inflow of 14 billion euros.
While most lenders have received strong returns from investment banking due to higher-than-year trading volumes and volatility, von Moltke said he expects to see a normalization in 2021.
“However, so far in the year to date, we have seen the trend from last year continue into January, both in terms of our performance and what we see about the market environment,” he said.
Here are the other main events:
- Total revenue for the fourth quarter was 5.5 billion euros, compared to 5.35 billion euros for the same period in 2019, bringing net organization revenue for the year to 24 billion euros, up 4% from 2019.
- The average ratio of level 1 (CET1) – a measure of bank comfort – came in at 13.6%, unchanged from the fourth quarter of 2019.
- Quarterly loan loss provisions were 251 million, up from 723 million in the last quarter of 2019.
“In the most crucial year of our transformation, we were able to do more than the effects of transformation and enhanced credit arrangements – despite the global pandemic,” said Christian Christian Sewing in the employment report.
“We have built strong foundations for sustainable profit, and we are confident that this positive trend will continue in 2021, despite these challenging times. “