Deutsche Bank AG on Wednesday reported higher profit and revenue that beat expectations, overcoming a challenging investment-banking market to confirm its guidance for the year.
The German lender’s DB, +2.54% DB1, -0.31% net profit for the three months to the end of September was 1.12 billion euros ($1.12 billion), a jump from EUR194 million for the same period last year, and beating expectations of EUR960 million, according to company-compiled consensus expectations.
Revenue climbed 15% to EUR6.92 billion, with a 25% rise at its corporate bank, supported by higher net interest income.
Its investment bank saw slower growth, up 6%, as higher rates revenue more than offset significantly lower revenue at its credit-trading operations.
Analysts had forecast group revenue at EUR6.50 billion.
The bank “saw the benefits of tight risk discipline, strong capital, and conservative balance-sheet management”, Chief Financial Officer James von Moltke said.
However, the bank also increased its provisioning for credit losses to EUR350 million from EUR117 million a year earlier, as it prepares for a more challenging economic outlook.
The Frankfurt-based lender’s common equity tier 1 ratio–a measure of a bank’s ability to withstand financial stress–was 13.3%, up from 13% at the end of the second quarter, it said.
Meanwhile, return on tangible equity improved to 8.2% from 1.5% in the prior-year period.
Deutsche Bank also reduced its exposure to Russia in the period, to around EUR200 million from EUR600 million at the end of June.
The company confirmed its full-year guidance of revenue between EUR26 billion and EUR27 billion, with revenue at its investment bank expected to be slightly higher year-on-year
Higher rates drove net interest income at the company to EUR3.66 billion from EUR2.77 billion in the third quarter of 2021, it said.
“We have significantly improved Deutsche Bank’s earnings power and we are well on track to meet our 2022 goals,” Chief Executive Christian Sewing said.
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