Deutsche Bank’s trading revenue to decline for third consecutive quarter: Report
- The investment banking revenue in the third quarter will likely be in line with current analyst expectations, said the CFO.
Deutsche Bank AG will likely see a third consecutive quarter of declining revenue from trading, according to a report by Bloomberg. The fixed-income unit will see a ‘normalization’ between July and September compared to the strong performance a year ago, Chief Financial Officer (CFO) James von Moltke said at a conference hosted by Bank of America Corp, according to Bloomberg.
The overall investment banking revenue in the period is set to decline as a result, even though income from advising on deals and underwriting debt and equity issuance will likely be higher, said the CFO.
Deutsche Bank’s securities unit was by far the biggest growth driver for Chief Executive Officer Christian Sewing for the past several years, but it has recently been replaced in that role by the corporate and private banking unit, which are benefiting from higher interest rates, according to Bloomberg.
Germany’s largest lender is seeking to boost those businesses further, with the CFO saying, that any allocation of new capital to the investment bank will be limited while the retail and commercial banking divisions are set to get more.
Investment banking revenue in the third quarter will likely be in line with current analyst expectations, said the CFO. The Bloomberg-compiled consensus sees about €2.25 billion ($2.4 billion), which would be equivalent to a year-on-year decline of roughly 5 per cent, according to the report.
Von Moltke also said that the lender is on track to meet or exceed its 2025 financial targets, largely because rising interest rates have boosted the divisions outside the investment bank more than Deutsche Bank expected when it presented the goals.
Meanwhile, Germany's top financial regulator has called problems affecting customers at Deutsche Bank's Postbank unit ‘unacceptable’, two weeks after the agency issued an unusual rebuke of the lender.
Deutsche began acquiring Postbank, with its millions of clients and roots in the country's postal system, in 2008 during the global financial crisis, but for years struggled to complete its integration. The bank said in July it had completed a final phase of the integration, but two weeks ago, the regulator BaFin said it had seen "considerable disturbances" at Postbank, according to a report by news agency Reuters.
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