Deutsche Bank Shares rose to a more than six-year high on Thursday after the German lender reported a 10% rise in first-quarter profit, beating expectations as a recovery continues at its investment banking unit.
Deutsche Bank shares preliminary closed the trading session up 8.2%. After a morning decline, the share price reversed to its highest intraday level since December 2017, according to LSEG data.
Net profit attributable to shareholders for the period was 1.275 billion euros ($1.365 billion), beating analysts’ consensus estimate of 1.23 billion euros for the period, LSEG said.
Deutsche Bank said it was its highest first-quarter profit since 2013. It was also the bank’s 15th consecutive quarterly profit.
Group revenue rose 1% year-on-year to €7.8 billion, which the bank attributed to higher fee and commission income, as well as growth in fixed income and currencies. Revenue also beat analysts’ forecasts of 7.73 billion euros, LSEG said.
The investment bank’s revenues rose 13% to 3 billion euros, after a 9% decline for the full year 2023 that led to lower overall profits. With these results, the division once again became Deutsche Bank’s most profitable division, driven by growth in funding and credit trading revenues.
Other first quarter highlights include:
- Net inflows into the Private Bank and Asset Management divisions amounted to €19 billion.
- The provision for credit losses amounted to 439 million euros, compared to 488 million in the fourth quarter of 2023.
- The capital tier 1 (CET1) ratio, a measure of a bank’s solvency, was 13.4%, down from 13.6% in the same period last year.
“There is momentum in the business, in fact in all four areas, and we do think it’s sustainable,” Deutsche Bank Chief Financial Officer James von Moltke told CNBC’s Annette Weisbach on Thursday.
“We are meeting our cost and return on capital commitments this quarter.”
Germany’s largest lender reported a net profit of 1.3 billion euros in the previous quarter and 1.16 billion euros in the first quarter of last year.
The bank announced in 2023 that it would cut 3,500 jobs in the coming years as it targets €2.5 billion in operational efficiencies to improve profitability and boost shareholder returns.
In a research note on Thursday, analysts at Keefe, Bruyette & Woods called the group’s results “reasonable” but “nothing special,” highlighting the investment bank’s strong performance but the underperformance of its corporate banks and asset management units.
Credit losses remained high while the outlook remained unchanged despite expectations of higher interest rates, they added.