Deutsche Bank beats expectations and swings to profit

Deutsche Bank has reported a profit for the third quarter.

Net profit revealed a net profit of €182m with a 13% growth in net revenues to €5.9bn.

This growth in profits was much higher than analyst expectations for the period, who predicted a €77m loss. The German lender posted a net loss of €832m for the same period last year.

Chief executive Christian Sewing said: “In the fifth quarter of our
transformation, we not only demonstrated continued cost discipline, but also our ability to gain market share.

“Our more focused business model is paying off and we see a substantial part of our revenue growth as sustainable.

“Our balance sheet strength and high quality risk management enable us both to support clients in challenging times and to take advantage of new business opportunities,” he added.

Deutsche Bank’s share price is up more than 15% this year so far and has recovered from a decline during the March coronavirus crash.

The bank has made a loss for the past five years and is undergoing cost-cutting schemes by cutting jobs, exiting some businesses, and cutting costs.

CFO James von Moltke told CNBC: “We are now very focused on the businesses where we can compete and win, and where our businesses and our clients and our people know where we are focused and where we can be really competitive, so I think we are seeing the benefits of that focus.”

The bank is reportedly in talks to sell a IT services unit to Tata Consulting Services (TCS). The result of the deal is expected to be shared by the end of the year.

This week, major lenders have shared trading updates with HSBC revealing a 36% slide in profits and Santander posting a profit for the third quarter.