Deutsche Bank reports higher third quarter profit amid 6% decline in investment banking

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Deutsche Bank said its third quarter net profit increased as lower bad debt charges helped offset the decline in the investment bank’s income and additional costs associated with its review.

Still, the German lender has said he is on track to meet ambitious financial goals next year, a key test for chief executive Christian Sewing, who in 2019 pledged to make the bank leaner and more lean. more profitable after years of broken promises from its predecessors.

Investors seem increasingly convinced and recently Moody’s and Fitch upgraded Deutsche Bank’s ratings.

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While the pandemic could have deviated Sewing’s plans, in some ways it actually helped. Like other global banks, Deutsche Bank has seen its Wall Street business flourish over the past year as businesses and investors adjust their investments and raise funds. It has also benefited from its location in Germany, where the government has spent hundreds of billions to keep the economy afloat, resulting in a decline in sour lending.

Deutsche Bank posted a 2% increase in turnover to 6.04 billion euros, the equivalent of 7 billion dollars. Net income at September 30 rose 6% to € 329 million. Its net income is above an average analyst consensus of € 280 million.

Investment banking revenue fell 6% in the third quarter to 2.23 billion euros as client activity began to normalize this year. But the result was higher than analysts had expected and the bank said it still expects the company to operate in 2021 in line with record levels last year.

The turnover of its asset management division is up 17%, while it has remained stable in its investment bank and is slightly down in its retail franchise.

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Like other European banks, Deutsche Bank’s core business of accepting deposits and loans has come under intense pressure due to a negative interest rate environment. Recent inflation has prompted the European Central Bank to start raising rates earlier than expected to cool the economy, but the central bank has indicated it is reluctant to do so and believes the higher prices are temporary.

Write to Patricia Kowsmann at [email protected]

This article was published by Dow Jones Newswires

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