Deutsche Bank is looking to buck the trend of other European banks, rising sharply during a difficult market session. 👍
The German lender’s third-quarter net profit of 1.031 billion euros topped estimates of just under 1 billion. That was down 8% YoY but up 35% sequentially as it wrestles with troubles in its investment unit.
As for its segments, its corporate banking business benefited from higher interest rates, seeing revenues rise 21% YoY. Meanwhile, its investment arm revenues struggled with the rest of the market. Revenues were down 4% YoY and 12% YoY through the year’s first nine months. 📊
Overall, CFO James von Moltke said results are essentially in line with what the bank forecasted. Fixed income and currency revenues are normalizing, so the bank is focusing on other products like credit and financing.
Common equity tier one (CET1) capital continues to improve, rising to 13.9% from 13.8% last quarter and 13.3% last year. Return on tangible equity also increased from 5.4% to 7.3% over the last quarter. This shows investors that its capital levels and overall operational performance continue to improve.
Additionally, the bank expects 29 billion in revenues for the year, near the top end of its previous estimates. It also has the ability to release up to 3 billion euros more in capital to increase and accelerate share buybacks and/or dividends. 💰
That said, investors are not blind to the challenges ahead. Weaker European growth rates, macroeconomic uncertainty, and individual operational risks remain headwinds for the overall sector.
$DB shares rose 7% on the day. However, they’re still stuck in a long-term range as it tries to fight off the “mediocrity” much of Europe’s financial sector has experienced since the financial crisis. 😓
