Deutsche Bank has reported a net profit of €1.158bn ($1.28bn) for Q1 2023, beating analyst expectations and marking an 11th consecutive quarter of profit. The bank has been implementing a sweeping restructuring plan since 2019, aimed at cutting costs and improving profitability. CEO Christian Sewing said the results demonstrate the relevance of Deutsche Bank’s Global Hausbank strategy and that the bank is on track to meet or exceed its 2025 targets. Deposits for the quarter fell to €592bn from €621.5bn at the end of 2022, a decline attributed to increased price competition, normalization from elevated levels in the prior two quarters, and market volatility at the end of the quarter.
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Deutsche Bank’s corporate bank net revenues came in at €2bn for the quarter, up 35% YoY and the highest quarterly figure since the launch of its transformation program. Net interest income was the main driver, growing 71%. However, the bank also flagged job cuts for non-client facing staff and reported a sharper-than-expected 19% YoY fall in investment bank revenues. The bank is currently implementing additional efficiency measures across the front office and infrastructure, including strict limitations on hiring in non-client facing areas, focused reductions in management layers, streamlining the mortgage platform, and further downsizing of the technology centre in Russia.
Other data highlights for the quarter include revenues of €7.7bn, up from €7.33bn in Q1 2022, and a CET 1 capital ratio of 13.6%, up from 12.8% a year ago and 13.4% the previous quarter. Provision for credit losses stood at €372m, compared to €292m a year ago. Deutsche Bank’s Frankfurt-listed stock plummeted late last month despite the bank’s strong financial position. However, CFO James von Moltke told CNBC that the market turmoil triggered by the collapse of U.S.-based Silicon Valley Bank in early March had enabled the bank to prove its mettle to a skeptical market. Von Moltke also suggested that Deutsche Bank would be a “natural beneficiary of fallout” from the stricken Credit Suisse’s demise.
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