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Frankfurt / Main (dpa) - With the best quarter in seven years, Deutsche Bank has laid the foundation for the targeted profit for the full year 2021.
"We can not only look back on an excellent quarter, the outlook is also optimistic," said CEO Christian Sewing on Wednesday.
For the period from January to March inclusive, around 1.6 billion euros plus were on the books before taxes.
Interest payments for certain bonds still have to be deducted from the after-tax profit of just over a billion euros (previous year: 66 million euros), so that the bottom line was a profit of 908 million euros for the shareholders of the Frankfurt Dax group.
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A year earlier, this value was minus 43 million euros.
Nevertheless, Germany's largest financial institution succeeded in reversing the trend in the year of the Corona crisis with the first annual surplus since 2014. The bank posted a surplus of 624 million euros for the past year, of which the shareholders accounted for 113 million euros.
CFO James von Moltke did not want to give a specific forecast of net profit this year.
However, the overall development points to a better result than 2020, said von Moltke in a conference call with journalists.
Deutsche Bank will probably have to set aside significantly less money for impending loan defaults than in the past year, while earnings - i.e. total revenues - are likely to remain stable.
In the first three months of the current year, the bank was able to increase its income compared to the same quarter of the previous year by 14 percent to a good 7.2 billion euros.
In addition, cost reductions and a significant reduction in risk provisioning for possible loan defaults from 506 million to 69 million euros contributed to the good performance in the quarter.
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"We firmly expect that the consequences of the low interest rates will gradually reduce our earnings in the corporate bank and the private customer bank year-on-year," said Sewing.
In addition, there are “more and more indicators” that a considerable part of the earnings growth in the investment bank since 2019 will prove to be sustainable.
"Even if the markets normalize in the coming months as expected, we now expect similarly high earnings for 2021 as in the very strong previous year."
The capital market business is booming, the profits in the investment bank are gushing, although the management had trimmed the division as part of a radical restructuring of the group since summer 2019.
Deutsche Bank has withdrawn from global equity trading.
The institute finally wants to leave the inglorious past of investment banking with scandals and expensive legal disputes behind.
Now the income in the division climbed by a third compared to the same quarter of the previous year to around 3.1 billion euros, the pre-tax profit shot up from 637 million euros to 1.49 billion euros.
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But the bank also grew in business with corporate and private customers as well as in asset management, with profits increasing in all business areas, according to the information.
"The first quarter is further evidence that Deutsche Bank is on the right track in all four business areas and is becoming more profitable in the long term," said Sewing.
The Deutsche Bank fund subsidiary DWS also posted a strong increase in profits in the first quarter.
Among other things, higher fee income let the surplus rise by 39 percent to 169 million euros.
Deutsche Bank wants to further reduce its costs by closing branches and downsizing.
By the end of this year, the institute will close 97 of the last 497 locations in its home market.
The network at Postbank, which belongs to the group, is also being thinned out further, where 50 of the last 800 branches will be closed this year and next.
The bottom line is that the downsizing of branches costs almost 1200 full-time positions, and a few days ago management and works councils agreed on the modalities of the job cuts: severance payments, partial retirement and early retirement. The downsizing in the branches is part of the plans announced in July 2019 to reduce the number of full-time positions in the Group by around 18,000 to 74,000 worldwide by the end of 2022. At the end of March of the current year, the group had 84,389 full-time employees, almost 2,300 fewer than a year earlier.
After two rounds of zero dividends, the Management Board continues to give the shareholders hope for better times: Overall, the bank has “a very good basis to be able to distribute capital to our shareholders again as planned from next year,” affirmed Sewing.
For a future profit distribution, the bank set aside 300 million euros in the first quarter.
© dpa-infocom, dpa: 210428-99-382377 / 2
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