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  1. Regulation & Compliance
January 31, 2013updated 04 Apr 2017 3:29pm

AWM full year pre-tax income slumps 83%

Deutsche Bank’s Asset and Wealth Management (AWM) division’s pre-tax income dropped sharply by around 83% on a full-year basis with a €782m ($1bn) slump reported in 2012.

By Elsa Buchanan

Deutsche Bank’s Asset and Wealth Management (AWM) division’s pre-tax income dropped sharply by around 83% on a full-year basis with a €782m ($1bn) slump reported in 2012.

Pre-tax income fell to €160m ($216m) in 2012 from €942m in 2011.

Net revenues at the AWM unit also dropped 6%, or €72m to €1.1bn in the fourth quarter of last year when compared to the fourth quarter of 2011.

The decrease was mainly driven by €65m effects from mark-to-market movements on investments held to back insurance policyholder claims in Abbey Life, as well as lower revenues of €34 million in Alternative Fund Solutions due to reduced demand for hedge fund products, said Deutsche Bank.

The results were also partly offsetting were higher revenues from advisory/brokerage of €58m mainly due to WM Asia-Pacific and WM Americas, the bank added.

However for the full year, AWM revenues increased by €189m to €4.47bn on a year to year basis from €4.2bn for the year 2011 representing a 4% rise.

 

Lack of transparency on wealth performance

The German bank has changed the structure of its financial reports giving much less insight into the performance of the wealth management division, beyond these top line figures.

During the fourth quarter 2012, invested assets in AWM increased by €32bn to €944bn.

The bank no longer breaks out its wealth management invested assets, however based on Deutsche’s Q3 2012 figure of €296bn and the AWM’s Q4 performace, PBI estimates wealth assets to be static.

 

New strategy behind grey results

During the last quarter of 2012, Deutsche Bank proceeded with the implementation of its Strategy 2015+, announced in September last year.

The strategy, which aims at a fuller integration of the bank’s business units, impacted on both the AWM and the bank’s overall results.

Deutsche Group suffered a €2.6bn loss before income taxes in the fourth quarter of 2012.

The cost/income ratio was 90.8% in 2012, up from 78.2% in 2011.

However, Deutsche Group recorded a €5m hike in its revenues, to €33.7bn up from €33.2bn in 2011 on a full year basis.

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