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Deutsche Bank Q1 Profit Rises; Plans EUR2.8 Bln Capital Increase


German lender Deutsche Bank AG (DB) Monday reported higher profit for the first quarter, helped by a marginal growth in revenues and disciplined cost management. The bank also decided to raise capital for 2.8 billion euros by privately placing 90 million new shares.

Additionally, Deutsche Bank intends to strengthen its total capital structure via the potential issuance of additional subordinated capital instruments of up to 2 billion euros over the next twelve months.

Co-CEOs Jürgen Fitschen and Anshu Jain said, "We delivered robust financial performance, with substantial profit growth versus the prior year quarter. This reflects the strength of our franchise in the face of continued regulatory challenges, and cost efficiencies arising from our Operational Excellence Program, which is proceeding as planned."

Net income attributable to the company's shareholders increased to 1.65 billion euros ($2.16 billion) from 1.39 billion euros. Earnings per common share grew to 1.71 euros from 1.45 euros.

Income before taxes increased to 2.41 billion euros from 1.89 billion euros.

Net revenues grew 2 percent to 9.4 billion euros from 9.2 billion euros.

Net interest income fell 14 percent to 3.65 billion euros while total non-interest income climbed 16 percent to 5.74 billion euros.

Revenues in Corporate Banking & Securities or CB&S slid 4 percent to 4.6 billion euros, as a less favorable market environment led to reduced client activity.

In Global Transaction Banking or GTB, revenues grew 3 percent to 992 million euros, as volume driven revenue growth offset continued interest margin pressure.

Asset & Wealth Management or AWM revenues increased 8 percent to 1.2 billion euros, reflecting higher revenues associated with Abbey Life.

Private & Business Clients or PBC revenues slipped 1 percent to 2.4 billion euros, as strong performance from credit products partly offset lower deposit based revenues.

Provision for credit losses rose to 354 million euros from 314 million euros, driven mainly by GTB where provisions increased due to a single client credit event within the trade finance business.

Non-interest expenses dropped 5 percent to 6.6 billion euros and General and administrative expenses declined 12 percent to 368 million euros.

The bank's Core Tier 1 capital ratio, was 12.1 percent at the end of the first quarter, up from 11.4 percent at the end of the fourth quarter of 2012.

Pro-forma fully loaded Basel 3 Core Tier 1 ratio was 8.8 percent as at March 31, exceeding the company's target of 8.5 percent.

Following the completion of the latest capital measure, which is expected to add 2.8 billion euros to its Core Tier 1 capital, Deutsche Bank expects pro-forma fully loaded Basel 3 Core Tier 1 ratio to increase to 9.5 percent.

The lender also reaffirmed its commitment to the previously announced strategic and financial aspirations for 2015.

The stock closed up 1.9 percent on Monday at 32.90 euros.

by RTTNews Staff Writer

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