Profits rise at Deutsche Bank

Deutsche Bank, Europe's biggest bank, said third-quarter profit unexpectedly rose after investment banking revenue exceeded targets.

Net income climbed an annual three per cent to €747 million in the three months through September, the Frankfurt-based company said in a statement today.

"The more favourable environment combined with persistently high central bank liquidity benefited both the stock markets, which reached their highest levels in over a year, and the issuance of equity and debt capital," Deutsche Bank said in the statement.

"Therefore it is likely that investment banking and asset management revenues achieved moderate growth in spite of a decline in trading volumes."

Deutsche Bank is seeking to increase its share of income from investment banking among the world's largest banks, helping offset costs associated with firing employees and restructuring.

The lender, which is cutting 1,900 jobs, has said it will incur €4 billion in costs to achieve annual targeted savings of €4.5 billion by 2015.

The investment bank's revenue from trading in the debt markets surged an annual 67 per cent to €2.5 billion, Deutsche Bank said.

The average estimate of six analysts was for revenue of €2 billion.

Revenue from trading in equities jumped 67 per cent to €642 million, beating a €473 million forecast.

Deutsche Bank advanced 13 per cent this year in Frankfurt trading, outperforming the 4 per cent gain in the 28-company Euro Stoxx Bank Index.

The German lender set a target last month of boosting its after-tax return on equity, a key measure of profitability, to at least 12 per cent by 2015 from 8.2 per cent in 2011.

Deutsche Bank scrapped its profit goal for last year after Europe's debt crisis raised questions about the future of the euro and battered financial markets.

European Central Bank president Mario Draghi has since helped buoy markets and spurred a surge in sales of securities in the third quarter by pledging in August to conduct bond purchases to prop up some euro-region countries.

Bloomberg