The two major German banks, Deutsche Bank and Commerzbank, achieved good results in the first three months in an environment burdened by the Ukraine war.

Despite the uncertainties, Deutsche Bank managed to jump in profits in the first quarter.

After taxes and the servicing of subordinated bonds, she earned more than one billion euros.

Despite higher risk provisions, Commerzbank achieved a consolidated profit of EUR 284 million in the first quarter, more than twice as high as a year earlier: Commerzbank intends to publish the detailed figures for the first quarter on May 12th.

Markus Fruehauf

Editor in Business.

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The two largest German private banks fared better in the first quarter than their US competitors, which had to make higher provisions for loan defaults.

That was also the case at Deutsche Bank and Commerzbank, but things went better in other areas.

The CEO of Deutsche Bank, Christian Sewing, was satisfied with the start of the year: "The results of all business areas are on or above plan, and we have achieved our highest quarterly profit in nine years," he was quoted in the press release.

Profit increases by 17 percent

Germany's largest financial institution earned the bottom line - after deducting interest on subordinated bonds - 1.06 billion euros, an increase of 17 percent.

Analysts had expected only around 950 million euros on average.

Deutsche Bank was thus able to report the seventh quarter of profits in a row.

Group income increased by 1 percent to 7.3 billion euros.

"We are therefore in a good position to achieve our goals for this year," said Chief Financial Officer James von Moltke.

At the same time, however, the bank warned that the current environment was becoming increasingly challenging and that cost pressure had intensified.

This cost pressure, which von Moltke also attributed to wage developments, was not well received on the stock exchange: Deutsche Bank's share price fell by 5.7 percent to EUR 9.54, while Commerzbank's stock fell by 2.2 percent to EUR 6 .00 euros more expensive.

The Ukraine crisis has the potential to impact annual results in the important year 2022, Sewing said.

In the summer of 2019, he initiated a comprehensive restructuring of the group.

Entire departments have been closed.

The bank parted with particularly risky parts of investment banking and initiated tough austerity measures.

In the current year, an after-tax return (ROTE) of 8 percent should be achieved with income of 26 to 27 billion euros.

By 2025, the return should increase to more than 10 percent.

In the first quarter it was 8.1 percent.

Deutsche Bank increased its earnings in the important investment banking segment by 7 percent to 3.3 billion euros in the first quarter.

Fixed Income & Currencies (FIC) revenues increased 15 percent.

In contrast, they fell in the advisory and underwriting business by 28 percent, which was mainly due to a significantly lower equity underwriting business.

In absolute terms, revenue growth in FIC exceeded the decline in Advisory.,

In the business with corporate customers, revenues grew by 11 percent to 1.5 billion euros and in the private customer business by 2 percent to 2.2 billion euros.

In asset management, for which the subsidiary DWS is responsible, an increase of 7 percent to 682 million euros was recorded.

However, DWS reported a cash outflow of 1 billion euros in the first quarter, which was justified by investors' concerns about inflation and the difficult market environment.

Because of this uncertain economic environment as a result of the Ukraine war and the sanctions against Russia, Deutsche Bank significantly increased risk provisions in the lending business to EUR 292 million from EUR 69 million a year earlier.

Commerzbank had to provide even more with half a billion euros.

Deutsche Bank made progress in terms of cost efficiency.

In order to earn one euro, she had to spend 0.73 euros in the first quarter.

In the same quarter of the previous year, EUR 0.77 was needed.

EUR 0.70 or a cost/income ratio of 70 percent is targeted for the year as a whole.

At the start of the year, the major US banks were struggling, among other things, with the easing of merger fever and fewer IPOs, also as a result of the Ukraine war.

The US banking giants Morgan Stanley, Goldman Sachs and Citigroup reported some sharp declines in profits for the first quarter.

On the other hand, things went well for the Swiss UBS in Europe, which achieved the best start to the year since 2007 in the first quarter.

Spain's largest bank, Santander, also posted first-quarter profit growth, up 58 percent.

The scandal-plagued Credit Suisse, on the other hand, is not finding its way out of the crisis in the new year either.

The second largest Swiss bank posted a loss of CHF 273 million in the first quarter of 2022 and is changing several positions in top management.