Frankfurt: Deutsche Bank AG reported on Tuesday a 67% rise in second-quarter net profit due to stronger corporate and investment banking, more profitable securities trading, and because of one-time charges that lowered the year-ago results.
The Frankfurt-based bank said net profit for the April-June period increased to €1.1 billion ($1.6 billion) compared with €645 million in the second quarter of 2008.
Revenues for the second quarter increased 46% to €7.9 billion from €5.4 billion in the second quarter of 2008, when revenues were hurt by €2.3 billion in write-downs.
The bank said the outlook for the remainder of the year hinged on how the global economy develops.
“Deutsche Bank turned in very satisfactory results,” Josef Ackermann, the bank’s chief executive said in a statement.
“The outlook for the remainder of 2009 is strongly influenced by progress in the global economy. In an uncertain environment, Deutsche Bank is well prepared. We have taken good advantage of improved conditions on financial markets, but we have also reduced costs and balance sheet risks, and strengthened our capital and liquidity base, all of which leaves us well-placed to confront near-term challenges,” Ackermann said.
Ackermann added that the company has witnessed a stabilization of the world’s banking industry and financial markets, and that increased liquidity and lower volatility were contributing to the bank’s more profitable business performance.
“Over the next few years, we expect the ‘flight to quality’ to continue, allowing Deutsche Bank to gain share due to their higher credit quality, superior technology and greater international reach,” Bernstein Research analysts wrote in a recent research note.
Deutsche Bank said its corporate banking and securities revenues were up 110% to €4.6 billion for the quarter, driven predominantly by revenues in sales and trading.
Revenues in the corporate investments division were up 123% to €660 million. The corporate and investment bank saw revenues increase 84% to €5.3 billion.
Meanwhile, global transaction banking, asset and wealth management, private clients and asset management and private business clients divisions all saw their revenues decline.
Deutsche Bank said it made provisions for credit losses of €1 billion during the quarter compared with €135 million in the second quarter of 2008.
Total assets at the end of the quarter were down 18% on the year to €1.7 billion. They were 13% lower on a six-month basis.
The tier 1 capital ratio, a measure of a bank’s liquidity, was 11% at the end of the second quarter, compared with just over 10% at the end of the first quarter of 2009.
In the first six months of the year, the bank reported net income of €2.3 billion compared with €504 million in the January-June period of 2008, a 356% increase.
For the first six-months, the company reported group revenues of €15.2 billion compared with €10 billion in the January-June period of 2008, a 51% increase.
Shares of Deutsche Bank closed up 2.2% at €52.03 on Monday.