Deutsche Bank Q1 pretax profit tumbles as trading weighs

Deutsche Bank's pretax profit fell by nearly a third in the first quarter to 1.68 billion euros ($2.33 billion) as an industry-wide slump in bond trading revenue depressed results, but the drag on earnings was not as bad as that seen by some of its rivals.

The pretax contribution from the investment banking division fell by more than a fifth, dragged down by a 10 percent fall in trading revenue, the bank said in a statement. The division includes Deutsche Bank’s main trading unit, whose biggest business is fixed income.

The earnings tumble signals a weak start to 2014 in what is traditionally a strong quarter. However the drop was not as significant as analysts had expected.

Revenue declines in trading, especially in bonds, have dogged investment banking results at peers such Barclays, JPMorgan and Citigroup.

The bank, Germany's largest, said it expected to suffer a hit of 1.5 to 2.0 billion euros due to new EU regulations expected to come into force this year that impose prudent valuation rules on assets.

That effect plus weaker results may complicate the bank’s plans to fortify its capital base through retained profit in a year when tougher regulations and supervisory demands are expected to prove costly.

Still, Deutsche repeated its profitability targets for 2015, which call for a post-tax return on equity (ROE) of over 12 percent for the group. The bank posted an ROE of 7.9 percent for the quarter.Deutsche Bank had been expected to post quarterly pretax profit of 1.4 billion euros ($1.9 billion), around 1 billion less than a year earlier, according to the average result of a Reuters poll.

Net profit totalled 1.1 billion euros, down 34 percent, also better than analysts had expected.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • India must take the UN’s lead in recognising gay rights

    In what has by now become a matter of course, our judiciary again demonstrated that it is miles ahead of our government in terms of staying in tune wi

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

Today's Columns

Urs Schoettli

Lee’s legacy will always guide Singapore

LEE Kuan Yew, the father of modern Singapore, died last ...

Rajgopal Nidamboor

Forget the past and embrace the present

It is all right to believe that one should always ...

Bubbles Sabharwal

Relationships and bitter realities

It’s a tangled web we spin The relationships we make, break ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture