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Deutsche Bank Posts Profit In Q2, Revenues Down; Updates FY21 View

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German banking major Deutsche Bank AG (DB) reported Wednesday a profit in its second quarter, compared to prior year's loss, with sharp drop in provision for credit losses. Net revenues were down slightly.

Looking ahead for fiscal 2021, Deutsche Bank updated guidance, and now expects net revenues to be ahead of guidance provided at the Investor Deep Dive on December 9, 2020.

Additionally, provision for credit losses is now expected to be lower than previous guidance, in a range of around 20 basis points of average loans.

Further, Deutsche Bank reaffirmed its 2022 ratio targets in the light of progress made in its transformation, such as a post-tax RoTE1 of 8 percent at Group level and over 9 percent for the Core Bank; a cost/income ratio of 70 percent; a Common Equity Tier 1 capital ratio of at least 12.5 percent and a leverage ratio (fully-loaded) of approximately 4.5 percent.

Christian Sewing, Chief Executive Officer, said, "Our pre-tax profit of € 1.2 billion in the second quarter demonstrates that we're well on the path toward our goal for a post-tax RoTE1 of 8 percent next year. All our businesses have contributed to the year-on-year profit growth, gained further relevance for our clients and continued to capture market share."

For the second quarter, net profit attributable to shareholders 692 million euros, compared to last year's loss of 77 million euros.

Group profit before tax was 1.17 billion euros, compared to last year's 158 million euros. Core Bank profit before tax climbed 90 percent from last year to 1.4 billion euros. Capital Release Unit reduces quarterly loss before tax by 56 percent.

Provision for credit losses was 75 million euros, down 90 percent from 761 million euros in the second quarter of 2020.

Net revenues of 6.24 billion euros, down 1 percent from 6.29 billion euros a year ago, as markets normalised in the second quarter.

Among segments, net revenues in Corporate Bank fell 8 percent from last year to 1.23 billion euros, and the drop was 11 percent in Investment Bank to 2.39 billion euros. However, Private Bank revenues grew 3 percent and Asset Management revenues went up 14 percent.

In the Asset Management segment, net inflows of 20 billion euros helped lift Assets under Management by 39 billion euros to 859 billion euros.

For the first half, Group profit before tax of 2.8 billion euros grew seven-fold from last year, with net revenues up 7 percent to 13.5 billion euros.

In Germany, Deutsche Bank shares were trading at 10.65 euros, up 0.8 percent.

In pre-market activity on NYSE, Deutsche Bank shares were trading at $12.62, up 0.80 percent.

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