Deutsche Bank restructuring under way as second-quarter profits impress
Frankfurt am Main — Germany’s biggest lender Deutsche Bank said on Wednesday that a major restructuring under its new CEO was in full swing, as it confirmed second-quarter profits that beat analysts’ previous expectations.
Net profits reached €401m on the back of €6.6bn in revenue, in line with preliminary figures the lender released earlier this month. Analysts surveyed by data company Factset had earlier forecast profits of about €120m.
But the result was still 14% lower than last year’s second-quarter earnings of €466m.
"We accelerated the reshaping of our bank significantly and proved the resilience of our global business" between April and June, said CEO Christian Sewing, who took over from crisis firefighter John Cryan in April with promises of a far-reaching shake-up.
Deutsche highlighted some €239m in costs for restructuring and employee severance — twice as much as the same quarter last year — as about 1,700 workers left. It added that it was "on track" to slash another 1,500 from its total headcount to dip below 93,000 by the end of the year, with a further ambition to shrink "well below" 90,000 by the end of 2019.
Meanwhile, it finished integrating subsidiary Postbank into its retail banking division in May. And in its investment banking division, Deutsche reported "substantial" reductions in "leveraged" — or borrowing-fueled — holdings of stocks and bonds, accounting for most of an €85bn reduction in such exposures across the bank.
There was slower progress on cutting costs, which fell 1% to €5.6bn in adjusted terms in the second quarter. But executives said they remained committed to reducing outlays from last year’s €23.8bn to 23 billion in 2018.