Deutsche Bank today reported net income of EUR 1,425 mn for the second quarter 2001, a 39% increase over 1Q2001.
The results for the second quarter of 2001 are influenced by special effects. A capital gain of more than EUR 1 bn was achieved from the placement of 2.2% of Deutsche Bank’s shareholding in Münchener Rückversicherungs-Gesellschaft AG (Munich Re). This positive gain was partially offset by downward value adjustments amounting to EUR 0.7 bn in the private equity and real estate portfolios reflecting the overall worsened market environment. Compared with 2Q2000 which was influenced by a gain of over EUR 2 bn from the reduction of our stakeholding in Allianz, net income declined by 49%.
Despite an increasingly tight market environment, net interest income and trading profit were both up compared with 2Q2000, while net commission income almost matched the results of last year’s 2nd quarter. Net income from investments benefited from the placement of Munich Re. Strategic investments for future growth and special projects (maxblue rollout, NYSE-Listing) contributed to an increase in operating expenses versus 2Q2000. Versus 1Q2001 the operating expenses declined further.
Earnings per share (excluding goodwill amortization) were EUR 2.59, up 67 Cents from 1Q2001. The number of outstanding shares increased by 5.1 mn to 621.6 mn due to options exercised for the first time under the Global Equity Plan. Group results
- Net total revenues of EUR 7,521 mn missed by 9.4% last year’s second quarter being influenced by the Allianz sale, but surpassed 1Q2001 by 0.8%.
- Net interest income of EUR 1,599 mn increased 3.6 % over 2Q2000.
- Risk provisioning had to be raised by EUR 174 mn against 2Q2000 or EUR 61 mn against 1Q2001 to EUR 245 mn due to the weakened economic outlook.
- Net commission income was EUR 2,786 mn or 4.2 % below 2Q2000, mainly due to lower securities trading volume with private clients, partially offset by the loan processing and guarantee businesses.
- Trading profit of EUR 1,813 mn again highlighted Deutsche Bank’s exceptional platform by surpassing the strong 2Q2000 result by 30.7% in a difficult capital markets environment. Equities trading declined due to weak markets (EUR 499 mn, -56% vs. 2Q2000), while Debt trading (EUR 353 mn, +509%), and OTC derivatives/swaps (EUR 398 mn, +77%) were strong contributors. The adoption of IAS 39 did not have a material impact on the 2Q2001 results.
- Net income from Investments (EUR 1,210 bn) consisted of gains from the placement of 2.2% of Munich Re shares. The main influence behind the 2Q2000 figure of EUR 2.4 bn was placement of Allianz shares at that time.
- Operating expenses of EUR 5,461 mn increased by 9.6 % from 2Q2000 with a 1.2% decline versus 1Q2001.
- The annualized Return on Equity after tax on average equity (excl. goodwill amortization) for the quarter was 24.1 % compared with 17.8% in 1Q2001.
The Corporate and Investment Bank
(CIB) generated in 2Q2001 net revenues of roughly EUR 4.6 bn in weak markets characterized by reduced transaction volumes and limited placement and advisory business, almost matching the 2Q2000 level of EUR 4.8 bn. Important contributors to this result were within Corporate Banking & Securities
our traditionally strong debt trading and origination as well as a robust loan business while Transaction Banking
benefited from Corporate Cash Management just recently awarded as the world’s best services provider by Euromoney. CIB pre-tax earnings declined to EUR 973 mn. Private Clients and Asset Management
(PCAM) achieved net revenues of more than EUR 2.0 bn, exceeding last year’s 2nd quarter despite difficult market conditions. The 2nd quarter pre-tax result of EUR 63 mn reflected the difficult overall market conditions as well as the impact of an increase in operating expenses to fund strategic investments and special projects. In our Personal Banking
Division, higher revenues from deposits and lending more than offset declining revenues from securities. In our Private Banking
Division, declining securities revenues due to lower activity in the U.S. were primarily responsible for lower revenues and profits. In the Asset Management
Division, measures taken to expand and globally align the business led to higher operating expenses.
The EUR 1.2 bn quarterly revenues of Corporate Investments
include gains from both the placement of 2.2% of our holdings in Munich Re and the sale of GEFA/ALD Group. This is in line with our intention to accelerate the divesture of our industrial shareholdings and to focus on core businesses. Value adjustments in the private equity and real estate portfolios impacted the overall results of Corporate Investments which contributed EUR 842 mn to the Group’s pre-tax profits in 2Q2001.