Deutsche second quarter income up 17%
(4 August 2015 – Germany) Deutsche Bank reported a net income of €818 million (A$1229 million) for the second quarter of 2015, compared with €238 million the same time last year.
Group net revenues rose 17 percent from the prior year, to €9.2 billion with noninterest expenses 17 percent higher at €7.8 billion.
Income before income taxes was €1.2 billion in 2Q15, compared with €917 million in 2Q14.
“The second quarter highlights the strengths of and challenges facing Deutsche Bank,” said John Cryan, co-chief executive.
“Solid revenue growth underscores the fundamental strengths of our businesses and the commitment of our people.
However, our challenges are also evident in the unacceptably high level of our costs, our continuing burden of heavy litigation charges, a balance sheet that must be more efficient, and the poor overall returns to our shareholders.”
Cryan said the bank must address these challenges.
“… for our strategy to succeed, we must become more efficient. We must be disciplined in how, where and with whom we do business.
“We must critically review any countries, business lines, products, and relationships that are unattractive.
“We must shrink our balance sheet, focusing on our many low-return assets. We must reduce organizational complexity, which inhibits effective decision making, blurs accountability and embeds wasteful cost.
“Only by doing this can we produce the attractive returns our shareholders deserve,” Cryan said.
“Our financial performance does not reflect our tremendous potential.
“Deutsche Bank is a first rate institution built around long-standing and deep client relationships, strong product lines, skilled and committed staff, an invaluable brand and an exceptional position in our home market.
“We are dedicated to ensuring that our financial performance reflects those inherent strengths.”
Corporate Banking & Securities net revenues of €4.3 billion increased by €804 million, or 23 percent, from 2Q14, driven by increased market volatility and favourable foreign exchange rate movements.
Private & Business Clients net revenues of €2.4 billion increased by €6 million, or 0.2 percent, compared to 2Q14.
Global Transaction Banking (GTB) net revenues of €1.1 billion increased by EUR 115 million, or 11 percent, from 2Q14, supported by favourable foreign exchange movements and volume growth.
Revenues in Trade Finance grew despite continued low margins.
In Securities Services, revenues increased mainly in the Americas.
In Cash Management, the business continued to suffer from the ongoing low interest rate environment.
GTB provision for credit losses was positive at €12 million in 2Q15 showing a decrease of €59 million compared to 2Q14 due to a high level of releases and recoveries as well as low provision levels.
Deutsche Asset & Wealth Management (Deutsche AWM) net revenues of €1.4 billion increased by €282 million, or 25 percent, compared to 2Q14, supported by favourable foreign exchange movements.
This growth was broad based across product categories, with Management Fees, Performance and Transaction Fees, Net Interest Income and Other Product revenues increasing versus the prior year period.
Deutsche AWM provision for credit losses was €1 million in 2Q15, demonstrating the continued high quality of the Deutsche AWM loan book.
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