Deutsche Bank: Q3 results - Transformation on track

Τετάρτη, 30 Οκτωβρίου 2019 11:48
Deutsche Bank: Q3 results - Transformation on track

Christian Sewing, Chief Executive Officer, said: “Despite having launched the most comprehensive restructuring of our bank in two decades, we delivered profits in our four core businesses during the quarter and grew loans and assets under management. Transformation is fully underway with tangible progress on costs and de-risking. A 13.4% CET1 ratio underlines our strength. I want to thank our employees for their strong performance and commitment during this period of change, and our clients for the strong vote of confidence in our new strategy." 

• Significant progress on transformation with regard to de-risking and costs
• As a result of strategic adjustments and in line with expectations, Group reports a net loss of 832 million euros and pre-tax loss of 687 million euros
• The Core Bank, which excludes the Capital Release Unit, made a pre-tax profit of 353 million euros after absorbing 315 million euros of specific revenue items(1), restructuring and severance and transformation-related charges (2)

o All four core businesses profitable in the quarter

• Capital Release Unit pre-tax loss of 1.0 billion euros, driven by the exit of nonstrategic business and transformation costs (3)
• Common Equity Tier 1 ratio stable at 13.4%

o De-risking in Capital Release Unit offsetting negative impact on earnings from transformation

• On track to meet 2019 cost reduction targets after 7th consecutive quarter of yearon-year reduction in adjusted costs (2) ex. transformation charges and bank levies

o Adjusted costs down by 1.8 billion euros annualised since 1st quarter 2018
o Noninterest expenses of 5.8 billion euros

• Core Bank business growth in key areas demonstrating franchise stability

o Loan growth of 12 billion euros
o Net inflows of 5 billion euros
o Assets under management of 1.24 trillion euros, up 125 billion euros in 2019, across Asset Management and the Private Bank
o Gained market share in core Debt Origination franchises; over 50 Equity Origination mandates completed, priced or won since July

• Group headcount below 90,000 for first time since Postbank acquisition

Group result driven by execution of transformation strategy

Deutsche Bank (XETRA: DBKGn.DB / NYSE: DB) has made significant progress with its restructuring in line with key targets which management announced in July. This included de-risking, cost reduction and growth in business volumes.

As a result of these restructuring efforts, Deutsche Bank reported a net loss of 832 million euros and a loss before tax of 687 million euros in the third quarter of 2019.
Results in the quarter included valuation adjustments on deferred tax assets (DTA) of 380 million euros, in line with expectations, as part of strategy execution.

Substantial transformation-related costs have now been recognised. Of a total of 2.8 billion euros of DTA impact anticipated in 2019, as laid out in the strategy announcement on July 7, 2.4 billion euros has now been recognised. 537 million euros of transformation-related charges, predominantly impairments on software, are now absorbed out of a currently anticipated 2019 total of up to 1.0 billion euros. 234 million euros in restructuring and severance charges have also been recognised, out of the currently anticipated 2019 total of 700 million euros.

The Core Bank reported a pre-tax profit of 353 million euros, with all four core businesses profitable in the quarter. Core Bank results were negatively impacted by 315 million euros of specific and transformation-related items, comprising 81 million euros of specific revenue items, primarily Debt Valuation Adjustments, 98 million euros in transformation charges and 135 million euros of restructuring and severance. Without these impacts, pre-tax profit in the Core Bank would have been 668 million euros.

The Capital Release Unit reported a loss before tax of 1.0 billion euros in the quarter, partly reflecting costs and the non-recurrence of revenues associated with discontinued business activities and transformation charges.

Percentage comparisons throughout this media release are calculated for the third quarter 2019 compared to the third quarter 2018 (year-on-year) unless otherwise specified.

Full Report

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