Deutsche Bank re­ports third quar­ter earn­ings

The Pak Banker - - Front Page -

FRANKFURT

Deutsche Bank to­day re­ported re­sults for the third quar­ter 2012. In­come be­fore in­come taxes was EUR 1.1 bil­lion in the third quar­ter 2012 ver­sus EUR 942 mil­lion in the third quar­ter 2011, an in­crease of EUR 185 mil­lion, or 20%.

Net in­come for the quar­ter was EUR 755 mil­lion, ver­sus a net in­come of EUR 777 mil­lion in the third quar­ter 2011. Di­luted earn­ings per share for the quar­ter were EUR 0.78, com­pared to EUR 0.74 in the third quar­ter 2011. Pre-tax re­turn on av­er­age ac­tive eq­uity was 7.9%, ver­sus 7.2% in the third quar­ter 2011. Jür­gen Fitschen and An­shu Jain, CoChair­men of the Man­age­ment Board and the Group Ex­ec­u­tive Com­mit­tee, said: "In the third quar­ter, we de­liv­ered a strong oper­at­ing re­sult which was sup­ported by an im­prove­ment in mar­ket con­di­tions. We ac­cel­er­ated our de-risk­ing and cap­i­tal for­ma­tion ini­tia­tives and, based on our in­creased Core Tier 1 cap­i­tal ra­tio of 10.7%, we are on track to achieve our Basel 3 cap­i­tal am­bi­tions. As im­por­tantly, we laid the foun­da­tions for the Bank's longer term fu­ture by con­clud­ing our 100-day strat­egy re­view and by launch­ing Strat­egy 2015+. In the near term, the macro en­vi­ron­ment re­mains un­cer­tain, and we will main­tain a cau­tious and risk-fo­cused ap­proach." Our net rev­enues in the third quar­ter 2012 were EUR 8.7 bil­lion com­pared to EUR 7.3 bil­lion in the third quar­ter 2011, an in­crease of 18%. Rev­enues in Cor­po­rate Bank­ing & Se­cu­ri­ties (CB&S) were EUR 4.3 bil­lion, up EUR 1.7 bil­lion, or 65%, ver­sus the third quar­ter 2011, re­flect­ing im­proved mar­ket con­di­tions and in­creased mar­ket ac­tiv­ity. Rev­enues in Global Trans­ac­tion Bank­ing (GTB) in-creased to EUR 1.0 bil­lion, up EUR 60 mil­lion, or 6%, from the third quar­ter 2011 re­flect­ing con­tin­ued growth and strong busi­ness vol­umes. As­set and Wealth Man­age­ment (AWM) rev­enues in­creased by EUR 95 mil­lion, or 11%, to EUR 971 mil­lion, mainly re­flect­ing a gain on sale of an in­vest­ment and higher rev­enues driven by mar­ket ap­pre­ci­a­tion and higher per­for­mance fees. Pri­vate & Busi­ness Clients (PBC) rev­enues were EUR 2.6 bil­lion in the cur­rent quar­ter, up EUR 128 mil­lion, or 5%, ver­sus EUR 2.4 bil­lion in the third quar­ter 2011. De­spite lower in­vest­ment ac­tiv­ity by re­tail clients, rev­enues were broadly un­changed ver­sus the third quar­ter 2011, which was neg­a­tively im­pacted by im­pair­ments of Greek gov­ern­ment bonds. The afore­men­tioned rev­enue in­creases were partly off­set by lower rev­enues in Con­sol­i­da­tion & Ad­just­ment (C&A), re­sult­ing from tim­ing dif­fer­ences at­trib­ut­able to dif­fer­ent ac­count­ing meth­ods used for man­age­ment ac­count­ing and IFRS.

Pro­vi­sion for credit losses was EUR 555 mil­lion in the quar­ter ver­sus EUR 463 mil­lion in the third quar­ter 2011, with the in­crease of 20% be­ing at­tribut-able to higher pro­vi­sion for credit losses recorded in CB&S that were par­tially off-set by lower pro­vi­sion recorded in PBC. The in­crease in CB&S came from our IAS 39 re­clas­si­fied port­fo­lio in­clud­ing EUR 61 mil­lion trig­gered through de- risk­ing. Non­in­ter­est ex­penses were EUR 7.0 bil­lion in the quar­ter, up EUR 1.1 bil­lion, or 18%, com­pared to the third quar­ter 2011. The in­crease is re­lated to sev­eral items, in­clud­ing higher com­pen­sa­tion- re­lated ex­penses at­trib­ut­able to im­proved oper­at­ing per­for­mance, re­struc­tur­ing ac­tiv­i­ties re­sult­ing from our Op­er­a­tional Ex­cel­lence Pro­gram, in­creased pol­i­cy­holder ben­e­fits and claims in Abbey Life as well as higher lit­i­ga­tion re­lated ex­penses. Partly off­set­ting these items was the non-re­cur­rence of the im­pair­ment of a Ger­man VAT claim recorded in the third quar­ter 2011.

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