According to reports on Thursday, Deutsche Bank has its tenth straight quarter of profit. This is about receiving a boost from high-interest rates and good market conditions. Deutsche Bank reported a $1.98 billion net profit that it attributed to the shareholders for the 4th quarter. This brings its annual net income for 2022 to five billion euros. It is a 159 percent increase from the previous year. The bank has almost doubled a consensus estimate from analysts polled by Reuters of euro 910.93 million net profit for the 4th quarter. And it exceeded a projection of euros 4.29 billion in the year.
What did the Deutsche Bank CEO, Christian Sewing comment
In the year 2019, Deutsche Bank launched a restructuring plan. This was to reduce costs and also improve profitability. Additionally, this involved exiting its worldwide equities sales and also trading operations. They also scaled back investment banking and slashed about 18,000 jobs by the end of 2022. The annual result marks a good improvement from the euros 1.9 billion in 2021. The bank CEO, Christian Sewing, said the bank was successfully transformed over the last three and a half years.
Sewing further said in a statement on Thursday that by refocusing its business around its core strengths, they have become more profitable, more balanced, and better cost-efficient. In 2022, they demonstrated this by delivering their best results for 15 years. They further made disciplined execution of their strategy. They supported their clients through challenging conditions and proved their resilience with good risk discipline and sound capital management.
The quarterly highlights
The Loan loss provisions were at euros 351 million euros, compared to euros 254 million in the 4th quarter of the year 2021. Common equity tier 1 or the CET1 ratio is a measure of bank solvency, and it came in at 13.4 percent, compared to 13.2 percent at the end of the last year. The total net revenue was euros 6.3 billion, up 7 percent from euros 5.9 billion for the same period in 2021. This brings the annual total to euros 27.2 billion in the year 2022. Deutsche Bank’s corporate banking unit showed a 39 percent growth in net interest income. High-interest rates, business growth, strong operating performance, and good FX movements aid this.
In words of James von Moltke, the CFO of Deutsche Bank
James von Moltke, the CFO of Deutsche Bank, said on Thursday that the 4th quarter tailed off for them in November and December. But, it was still a record quarter in their fixed income and currencies business for the 4th quarter, euros 8.9 billion for the entire year.
He further said that January was a month of strong performance. This was for the trading divisions of the bank, as market volatility is still ongoing. That encourages them that their general view was that the macro businesses’ volatility and conditions would ward off over time. But, it will be replaced if one likes it from a revenue perspective and increased activity in micro areas such as M&A, credit, equity, and debt issuance.