Deutsche Bank Posts Profit, Sees Positive Trend In FY21; Stock Down

Deutsche Bank Posts Profit, Sees Positive Trend In FY21; Stock Down

February 11, 2021

German banking major Deutsche Bank AG reported Thursday a profit in its fourth quarter as well as in fiscal 2020, compared to prior year’s loss, with good revenue growth mainly in Investment Bank.

Going ahead, the company said the overall positive trend is expected to continue in 2021. Meanwhile, Deutsche Bank shares were losing around 1 percent in German trading and around 2 percent in pre-market activity on the NYSE.

The bank further reaffirmed its 2022 targets for adjusted cost reduction.

Commenting about its first annual profit in years, the bank’s Chief Executive Officer Christian Sewing said, “With profit before tax of a billion euros, we’re ahead of our own expectations. We have built firm foundations for sustainable profitability, and are confident that this overall positive trend will continue in 2021, despite these challenging times.”

For the fourth quarter, net profit attributable to shareholders was 51 million euros, compared to net loss attributable to shareholders of 1.60 billion euros in the prior-year period.

Profit before tax was 175 million euros, compared to loss before tax of 1.29 billion euros a year ago.

Core Bank, which excludes the Capital Release Unit, recorded profit before tax of 591 million euros, compared to loss before tax of 435 million euros in the year-ago period. Adjusted profit before tax more than doubled to 1.0 billion euros in the quarter.

The Capital Release Unit reported a loss before tax of 417 million euros, narrower than last year’s loss of 858 million euros.

Group net revenues grew 2 percent to 5.45 billion euros from the prior year’s 5.35 billion euros. Core Bank net revenues were 5.5 billion euros, essentially flat year-on-year and up 2 percent excluding specific items.

Net revenues declined 4 percent in Corporate Bank, 1 percent in Private Bank and 11 percent in Asset Management. However, Investment Bank net revenues rose 24 percent.

Provision for credit losses of 251 million euros grew 5 percent. The Common Equity Tier 1 or CET1 capital ratio was unchanged from last year at 13.6 percent.

For fiscal 2020, attributable profit was 113 million euros, compared to last year’s loss of 5.72 billion euros. Total net revenues increased 4 percent from last year to 24.03 billion euros. Provision for credit losses surged 148 percent to 1.79 billion euros.

In Germany, Deutsche Bank shares were trading at 8.62 euros, down 1.28 percent. In pre-market activity on NYSE, DB shares were trading at $10.33, down 2 percent.

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