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April 27, 2022

Deutsche Bank posts another quarterly profit; slashes Russian credit exposures

Deutsche Bank has extended its quarterly profit streak by reporting a 17% surge in Q1 profit and slashed its Russian credit exposures during the quarter.

The bank posted a net income of €1.06bn for the first three months of 2022 as against €908 a year ago. This is the German lender’s seventh consecutive quarterly profit.

For the quarter ended 31 March 2022, the bank’s total net revenues were €7.33bn, a marginal rise of 1% compared with €7.23bn a year ago.

Division-wise revenue

The private banking unit of the bank posted net revenues of €2.2bn, a rise of 2% year on year. Revenues in the unit’s German operations rose by 1%, while the international private banking operations posted a 4% rise in the quarterly profit.

The unit’s net new business volumes were €13bn.

The asset management unit of the group posted net revenues of €682m, an increase of 7% compared to the year ago period.

“A 13% rise in management fees, to €621m, more than offset a decline of 34% in performance and transaction fees,” the bank said in its press statement.

The unit witnessed net outflows of €1bn in the quarter, driven by cash and fixed income products. Net inflows ex-Cash were €5.7bn.

Assets under management at the end of the quarter stood at €902bn, down 3% quarter on quarter but up 10% year on year.

Capital Ratio

The Common Equity Tier 1 (CET1) capital ratio at end of the first quarter was 12.8% as against 13.2% at the end of the previous quarter.

Russia Exposure:

During the quarter, Deutsche Bank further cut its Russia exposure. Gross loan exposure was reduced by 5% to €1.3bn, while net loan exposure fell 21% to €500m.

The bank reduced additional contingent risk by 35% to €1bn in the quarter. Guarantees were reduced by two thirds to €200m, largely due to roll-offs.

Comment:

Deutsche Bank CEO Christian Sewing said: “In this quarter, we showed our strength and resilience as the Global Hausbank. Our priority was to enable clients to respond quickly to geopolitical events and guard against risks. All our businesses delivered results in line with or ahead of our targets, and we produced our highest quarterly profit for nine years.”

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