July 27, 2016

Deutsche Bank reports second quarter 2016 pre-tax profit of 408 million euros and net income of 20 million euros

Key developments

  • 20% lower revenues year-on-year reflecting challenging environment and strategic decisions
    o Revenues, excluding NCOU and Hua Xia Bank, down 12%
  • 14% lower noninterest expenses reflect lower litigation expenses and compensation costs
  • Pre-tax profit of 408 million euros, down 67%, after goodwill impairment charge of 285 million euros, restructuring and severance charges of 207 million euros, and litigation charges of 120 million euros
  • Sustained financial strength
    o Fully loaded CET1 ratio improved slightly to 10.8%
    o Gain of ~40 basis points to CET1 ratio from Hua Xia disposal anticipated in second half 2016
    o Liquidity reserves of ~220 billion euros
    o Credit and market risk at very low levels
  • Significant progress on strategy implementation
    o First-phase restructuring in Germany agreed, involving ~3,000 positions
    o Formation of Intermediate Holding Company in US
    o Further de-risking of non-core assets
    o Operational separability of Postbank completed
    o Sustained investment in controls and infrastructure
  • All business divisions profitable
    o Global Markets: rates, FX comparable with strong prior year quarter, expect to remain No 4 in debt sales and trading
    o Corporate & Investment Banking: revenues in Transaction Banking stable year-on-year, No 2 in debt origination in Europe
    o Private, Wealth & Commercial Clients: 2,000 new commercial banking clients in Germany, over 10,000 new clients in Private & Commercial Clients International, consumer finance growth year-on-year
    o Deutsche Asset Management: substantial profitability in a high return-on-equity business

John Cryan, Chief Executive Officer:

John Cryan, CEO, said: “While our results show that we are undergoing a sustained restructuring, we are satisfied with the progress we are making.”

He continued: “We have continued to de-risk our balance sheet, to invest in our processes and to modernise our infrastructure. However, if the current weak economic environment persists, we will need to be yet more ambitious in the timing and intensity of our restructuring.”


The complete press release is available here.

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