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.

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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