Deutsche Bank profit report reflects challenges

Deutsche Bank, Europe’s largest investment bank, has released its profit figures, reporting a 30% decline of income before tax compared to the previous year, net income dropped by 34% to €1.08 bn. Nevertheless, shares rose as the report outperformed predictions.

Key factors for the current challenges are the persistent uncertainties over the situation in the Ukraine and changes in monetary policy.

A strong decline was notable in Corporate Banking and Securities, which fell by 22% before tax and in the Asset and Wealth Management Segment, where income before tax dropped by 23%.

The bank has been facing pressure to raise its capital levels by selling shares in order to in order to meet tighter restrictions on leverage.

Deutsche Bank’s Core Tier 1 ratio under Basel III rules now stands at 9.5 %, which represents a 0.2 % reduction compared to last year.

Reflecting of the current market volatility, Deutsche Bank’s shares in Frankfurt rose by 3.3. %, reflecting the strongest growth in 3 months, since the figures beat expectations.

In response to these challenges, Deutsche Bank has now announced to sell at least €1.5 bn of notes that can incur losses in crisis in order to help the firm meet the tightened restrictions on leverage.

ABOUT THE AUTHOR
Mona Dohle
Mona Dohle speaks German and Dutch, she is DACH & Benelux Correspondent for InvestmentEurope. Prior to that, she worked as a journalist in Egypt and Palestine. She started her career as a journalist working for a local German newspaper. Mona graduated with an MSc in Development Studies from SOAS and has completed the CISI Certificate in International Wealth and Investment Management.

Read more from Mona Dohle

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