A Deutsche Bank AG flag is flown outside the company’s Wall Street, New York office.
Mark Kauzlarich | Bloomberg | Getty Images
Deutsche Bank on Thursday exceeded profit expectations for 2020 as it emerged from the coronavirus crisis, led by strong performance in its investment banking division.
Germany’s biggest creditor posted a net profit for the full year of 113 million euros ($ 135.7 million), while analysts had expected a loss of 201 million euros, according to Refinitiv. Deutsche reported a loss of 5.7 billion euros in 2019 as it underwent a major restructuring.
The bank posted a net profit of 51 million euros in the fourth quarter, compared to analysts’ expectations of a loss of 325 million euros.
The bank’s CFO, James von Moltke, told CNBC shortly after the announcement that he had achieved all of his goals for the year.
Higher revenues and cost reductions helped Deutsche’s investment banking division to perform well, with net revenue growing 32% to 9.8 billion euros in 2020.
This “more than offset an increase in the provision for credit losses resulting from COVID-19,” the bank said in a statement.
Here are the other highlights:
- Total net revenue for the fourth quarter was 5.5 billion euros, compared to 5.35 billion euros in the same period in 2019, bringing the group’s net revenue for the year to 24 billion euros, an increase of 4 % compared to 2019.
- The Common Equity Tier 1 (CET1) ratio – a measure of bank solvency – was 13.6%, unchanged since the fourth quarter of 2019.
- Provisions for loan losses in the fourth quarter were 251 million, compared to 723 million in the last quarter of 2019.
“In the most important year of our transformation, we were able to more than offset the effects related to the transformation and the high credit provisions – despite the global pandemic,” said CEO Christian Sewing in the earnings report.
“We have built a solid foundation for sustainable profitability and are confident that this overall positive trend will continue in 2021, despite these challenging times.”
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