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Deutsche Bank Posts Profit In Q3; On Track To Meet View; Stock Up

Shares of Deutsche Bank AG were gaining around 3 percent in German trading after the banking major reported Wednesday a profit in its third quarter, compared to prior year’s loss mainly driven by strong Investment Bank revenues. Looking ahead, the bank said it remains on track to meet all financial and strategic targets related to its transformation plan.

The company reaffirmed guidance of full-year provision for credit losses of 35 to 45 basis points of loans. Further, the company said it is on track to meet full-year 2020 cost target of 19.5 billion euros.

For the third quarter, profit attributable to shareholders was 182 million euros, compared to last year’s loss of 942 million euros.

Profit before tax was 482 million euros, compared to a loss before tax of 687 million euros in the prior year quarter. Adjusted profit before tax was 826 million euros, compared to a loss of 84 million euros in the prior year quarter

These results were driven by profit growth in the Core Bank, together with lower losses in the Capital Release Unit.

Core Bank profit before tax rose nearly three-fold year-on-year to 909 million euros and adjusted profit before tax grew 87 percent to 1.2 billion euros.

The Capital Release Unit reported a loss before tax of 427 million euros, compared to last year’s loss of 1.0 billion euros, driven primarily by lower noninterest expenses.

Net revenues grew 13 percent to 5.94 billion euros from last year’s 5.26 billion euros. Revenues increased 9 percent excluding specific items, driven by growth in the refocused Core Bank.

Core Bank net revenues grew 9 percent year-on-year to 6.0 billion euros. According to the bank, the operating strength of the Core Bank, driven by revenue growth and continued cost reduction, more than offset multiple headwinds such as credit losses driven by COVID-19, ongoing costs of restructuring and the expected operating losses in the Capital Release Unit.

Investment Bank net revenues climbed 43 percent and Asset Management net revenues were up 4 percent, while Private Bank revenues were stable and Corporate Bank revenues were down 5 percent.

The company recorded a 10 percent reduction in noninterest expenses year-on-year to 5.2 billion euros.

In Germany, Deutsche Bank shares were trading at 8.15 euros, up 3 percent. In pre-market activity on NYSE, the shares were gaining around 3.5 percent to trade at $9.57.

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