Deutsche Bank Shares rose to their highest level in more than six years on Thursday afternoon, after the German bank reported a 10% increase in first-quarter profit, beating expectations amid an ongoing rebound at its investment banking unit.
After falling in the morning, shares rose 7.2% at 1:27pm in London, reaching the highest intraday level since December 2017, according to LSEG data.
Net profit attributable to shareholders amounted to 1.275 billion euros ($1.365 billion) for the period, exceeding analysts' overall expectations of 1.23 billion euros for the period, according to LSEG data.
Deutsche Bank said this was the highest first-quarter profit since 2013. It also marked the bank's 15th consecutive quarterly profit.
Group revenues rose 1% year-on-year to 7.8 billion euros, which the bank attributed to growth in commission and fee income, coupled with strength in fixed income and currencies. Revenue also came in ahead of analysts' expectations of €7.73 billion, according to LSEG.
Its investment bank's revenues rose 13% to €3 billion, after a 9% decline over the whole of 2023, dragging down overall profits. This performance reclaims the division as Deutsche Bank's top-grossing unit in terms of growth in financing and credit trading revenues.
Other highlights from the first quarter included:
Net inflows of €19 billion across private banking and asset management divisions. Provisions for credit losses amounted to 439 million euros, down from 488 million in the fourth quarter of 2023. The common equity capital tier 1 (CET1) ratio – a measure of banks' solvency – was 13.4%, compared to 13.6% in the same period last year.
“There is momentum in the business, actually across all four companies, and we think it's sustainable,” James von Moltke, Deutsche Bank's chief financial officer, told CNBC's Annette Weisbach on Thursday.
“We are meeting our commitments on costs and capital returns in the quarter.”
The largest bank in Germany announced net profits of 1.3 billion euros in the previous quarter and 1.16 billion euros in the first quarter of last year.
In 2023, the bank announced that it would cut 3,500 jobs over the coming years, targeting €2.5 billion in operational efficiency to boost profitability and increase shareholder returns.
In a research note on Thursday, analysts at Keefe, Bruyette & Woods described the group's results as “reasonable” but “nothing special,” highlighting strong investment banking numbers but weak performance in its corporate banking and asset management divisions.
They added that credit losses remained high while guidance remained unchanged despite expectations of higher interest rates.
