Deutsche Financial institution outcomes for the primary quarter of 2021

A general meeting of Deutsche Bank

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LONDON – Deutsche Bank on Wednesday reported a profit of € 908 million ($ 1.1 billion) for the first quarter, driven by continued strong performance in investment banking.

According to Refinitiv, the bank far exceeded the analysts’ expectations for a net profit of 642.95 million euros and showed a significant improvement compared to the profit of 51 million euros achieved in the fourth quarter of 2020.

Here are the other highlights:

• Net sales in the first quarter were 7.2 billion euros compared to 6.35 billion euros in the same period in 2020.
• The core capital ratio (CET1) – a measure of the solvency of banks – was 13.7% compared to 12.8% in the first quarter of 2020.
• Loan loss provisions in the first quarter were 69 million, down 86% from 506 million in the first quarter of 2020.
• The return on tangible equity (RoTE) reached 7.4% after 3% in the same three months of the previous year.

Germany’s largest lender followed in the footsteps of many of its Wall Street competitors and saw a significant leap in profits. Goldman Sachs, JPMorgan and Morgan Stanley have exceeded expectations for the first quarter over the past few weeks.

The income of the investment banks rose compared to the previous year by 32% to 3.1 billion euros, while the profit before taxes rose by 134% to 1.5 billion euros.

CFO James von Moltke suggested in February that the increased trading volume, which had boosted investment banking revenues, continued into the first quarter, but expected it to normalize in the course of 2021.

The bank also avoided the impact of the collapsed U.S. hedge fund Archegos Capital, where UBS, Credit Suisse, and several others saw significant gains in the first quarter.

In the past two years, the bank has initiated a mass restructuring of its business, the costs of which, along with increased loan provisions, had weighed on earnings. However, the German returned to profit in 2020 and posted a net profit of 113 million euros for the full year.