Deutsche Bank first-quarter profit surges on debt trading

Total revenues down 9% at €7.3bn as it posts net profit of €575m

Deutsche Bank benefited from lower legal costs for past misdeeds and a rebound in debt trading.

Deutsche Bank benefited from lower legal costs for past misdeeds and a rebound in debt trading.

 

Deutsche Bank more than doubled its first-quarter net profit to €575 million, benefiting from lower legal costs for past misdeeds and a rebound in debt trading.

Germany’s flagship lender beat expectations of analysts who had expected the bank to post a first-quarter net profit of €522 million.

“Client engagement is strong, asset flows are returning across the bank and activity is picking up. Our cost-cutting efforts are starting to pay off, while we have reduced complexity significantly,” chief executive John Cryan said in a statement on Thursday.

The bank’s litigation reserves decreased to €3.2 billion in the quarter, after it had booked record fourth-quarter sums for settlements, such as those over the sale of toxic mortgages and sham Russian trades.

Provisions for possible future legal action were flat at €2.4 billion.

Earlier this month, the US Federal Reserve fined Deutsche Bank $157 million (€144 billion) for violating foreign exchange rules and running afoul of the so-called Volcker Rule on speculative investments, leaving a probe into sanctions violations as the only large remaining litigation issue.

Revenues at Deutsche Bank’s cash-cow bond-trading division were up 11 per cent in the quarter as it benefited from a surge in trading across interest rate products, commodities and foreign exchange (FICC), while sales were down 10 per cent in equity trading.

Total revenues were down 9 per cent at €7.3 billion in the quarter.

The bank’s core tier 1 equity ratio rose to 14.1 per cent from 10.7 per cent a year earlier, strengthened by an $8.5 billion cash call earlier this month. – Reuters