FRANKFURT (Reuters) – Deutsche Bank (DBKGn.DE) on Wednesday posted a 14 percent drop in net profit in the second quarter from a year earlier, as Germany’s largest bank restructures under new leadership.
FILE PHOTO: The headquarters of Deutsche Bank is pictured in Frankfurt, Germany, March 19, 2018. REUTERS/Ralph Orlowski/File Photo
Deutsche last week already flagged that net profit would be more than double analysts’ forecasts in a rare piece of good news for the bank, which is cutting costs to revive profitability.
Net profit in the second quarter was 401 million euros ($468 million), down from 466 million euros last year. Revenues were flat at 6.6 billion euros, halting a steep decline from previous years.
The better-than-expected profit and revenue are a positive sign for new Chief Executive Christian Sewing, who took over in April and has embarked on plans to cut more than 7,000 jobs in an overhaul of the bank.
Deutsche Bank, trying to bounce back from three consecutive years of losses, has had a run of negative headlines, including an abrupt management reshuffle, a downgrade by Standard & Poor’s and failing the U.S. Federal Reserve’s stress test.
“We’re making important changes to our core businesses as promised, we’re headed in the right direction on costs, and our balance sheet quality is strong,” Sewing said on Wednesday.
At the investment bank, revenue was partly helped by a one-time gain of 57 million euros from a disposal in the quarter.
Revenue at its cash-cow bond-trading division dropped by 17 percent despite more volatile markets.
By contrast, some big U.S. banks posted sharp increases in profit as volatility caused by escalating trade tensions and central bank policy changes stirred a rise in trading volumes across Wall Street.
Goldman Sachs Group Inc (GS.N) reported a 44 percent rise in second-quarter profit on Tuesday, driven by strength in its investment banking and fixed income trading businesses.
Reporting by Tom Sims; Editing by Victoria Bryan, Maria Sheahan and Sunil Nair