RALPH ORLOWSKI/Reuters
- Deutsche Bank posted its first annual profit since 2014.
- Revenues at its investment bank jumped 32% year on year.
- Volatile markets have helped the big lenders profit despite shrinking economies.
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Deutsche Bank posted a full-year profit for the first time since 2014 last year, its fourth-quarter earnings showed on Thursday, as Germany’s biggest lender capitalized on the trading boom of 2020.
Deutsche posted a profit attributable to shareholders of 113 million euros ($136 million) in the year to the end of December. That was up from a loss of 5.72 billion euros a year earlier, and better than the roughly 300 million euro loss analysts polled by Reuters were expecting.
For the fourth quarter, the bank made 51 million euros of profit attributable to shareholders, compared to a loss of 1.6 billion euros in the same period in 2019.
Despite the rise in earnings, Deutsche’s shares fell 2.26% on Germany’s Xetra exchange in early trading to 8.51 euros.
"In the most important year of our transformation, we were able to more than offset transformation-related effects and elevated credit provisions - despite the global pandemic," said Deutsche chief executive Christopher Sewing in the fourth-quarter report.
Here are the key fourth-quarter numbers:
- Net revenue: 5.45 billion euros ($6.54 billion) versus 5.43 billion euros expected.
- Common equity Tier 1 capital ratio: 13.6% versus 13.35% expected.
- Credit-loss provisions: 251 million euros versus 293.33 million euros expected.
Deutsche's total net revenues climbed to 5.45 billion euros in the fourth quarter, up 2% from a year earlier. That took total revenues to 24.03 billion euros for the year as a whole.
Across the year, Deutsche set aside 1.79 billion euros to cover credit losses, including 251 million euros in the fourth quarter.
The investment bank was the star of the show, with a boom in bond trading causing net revenues to jump 32% year on year to 9.28 billion euros for 2020. Fourth-quarter revenues rose 24% to 1.89 billion euros.
It has been a rocky road back to profitability for Deutsche Bank, which has been embroiled in scandals over allegations of money-laundering, fined over the fixing of Libor, and recently was caught up in the Wirecard debacle.
The lender also announced 18,000 job cuts in 2019 as part of a plan to cut its investment bank - now the key driver of profits - down to size.
Sewing said he was confident Deutsche Bank would have a good 2021. "We have built firm foundations for sustainable profitability, and are confident that this overall positive trend will continue in 2021, despite these challenging times," he said.