29 April 2020
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Deutsche Bank reported a 1Q net loss of €43m this morning while growing revenues in its wealth management business and massively ramping up credit provisions grew from low levels in 2019, reflecting the deteriorating macro-economic environment as the covid-19 outbreak takes it toll.
The German multi-national, which is mid-way through a global restructuring, is the latest European bank to report its 1Q earnings, following regional rivals Credit Suisse and HSBC.
Overall the bank's performance beat analysts' expectations, with the wealth management division a particular bright spot. The wealth business saw strong growth across all regions, in particular in capital market products in the emerging markets region, which includes Asia-Pacific, the Middle East and Africa, in January and February. The WM deivision saw net inflows in investment products of $3bn.
I want to say a huge thank you to our employees, who have shown outstanding dedication and flexibility. I am proud of the way we have been there for our clients, our communities and for each other.”
The German lender posted a pre-tax profit of €206m, with a net income in 1Q2020 of €66m.
The bank said it had continued its strategic transformation as planned. Revenue and expense performance reflected continued momentum and execution of strategic priorities.
Of the total transformation-related effects anticipated between 2019 and 2022, 73% have now been recognised. The number of employees on a full-time equivalent (FTE) basis declined by 930 to 86,667 at the end of the quarter.
Provision for credit losses rose to €506m, which included approximately €260m related to covid-19. Provision for credit losses taken in the quarter increased allowance for loan losses to €4.3bn, equivalent to 95 basis points of total loans, DB reported. The full-year 2020 outlook is for provision of credit losses of 35-45 basis points of loans.
Deutsche Bank reported a profitable first quarter of 2020 while growing revenues in its Core Bank and maintaining balance sheet strength. Capital remained substantially above regulatory minimum levels, while credit provisions grew from low levels in the prior year, reflecting a deteriorating macro-economic environment impacted by COVID-19.
The bank continued its strategic transformation as planned. Revenue and expense performance in the Core Bank reflected continued momentum and execution of strategic priorities. Of the total transformation-related effects anticipated between 2019 and 2022, 73% have now been recognised. The number of employees on a Full Time Equivalent (FTE) basis declined by 930 to 86,667 at the end of the quarter.
Christian Sewing, Deutsche Bank's CEO, said: "In the current crisis, we have shown robust numbers and demonstrated strong performance in support of our clients across all core businesses. Conservative balance sheet management enables us to navigate the current environment from a position of strength as the leading bank in Europe's strongest economy.
"I want to say a huge thank you to our employees, who have shown outstanding dedication and flexibility. I am proud of the way we have been there for our clients, our communities and for each other."
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