Profits at Germany’s biggest lender Deutsche Bank tumbled in the third quarter, the group said Wednesday, but its chief executive said the long-troubled institution was on its way back to profitability.
Net profits at the Frankfurt-based group fell 65 percent year-on-year between July and September, to 229 million euros ($262.7 million), short of analysts’ forecasts of a 240-million-euro bottom line.
The group highlighted a fatter operating, or underlying, profit of 506 million euros, but that figure was still 46 percent below the third quarter of 2017.
Meanwhile revenues shrank 9.0 percent, to 6.2 billion euros.
‘This result is another milestone on the way to becoming a sustainably profitable bank,’ chief executive Christian Sewing said, promising a full-year result in the black for the first time since 2014.
After the departure of crisis-fighting chief executive John Cryan earlier this year, Sewing has heralded a new round of restructuring at Deutsche, slashing jobs and withdrawing from some far-flung financial market activities to focus more strongly on German and European business.
The group reported restructuring and severance costs weighing on its bottom line to the tune of 103 million euros in the third quarter, as it shrank its payroll by around 700 staff – with an aim for around 1,700 more departures by year’s end, to reach 93,000 employees.
Looking to the bank’s different divisions, the corporate and investment bank reported shrinking revenues, but highlighted its leading role in many of the largest stock market flotations so far this year in Europe and Germany.
Meanwhile the retail banking arm reported revenues slightly down even as it boosted lending to business and more people opened accounts at Deutsche’s Postbank subsidiary.
And the group’s asset management business also reported lower revenues, blaming the effect on a one-off windfall in the third quarter of 2017.
Mindful of past years when it was described as a threat to European and global financial stability, Deutsche highlighted a so-called ‘CET1’ capital ratio – measuring its buffer to absorb potential losses – of 14 percent, slightly higher than the previous quarter.