Deutsche Bank restructuring posts best quarter in 7 years
FRANKFURT – Deutsche Bank posted highest quarterly profits in seven years, as the bank’s long-running restructuring cut costs and the bank suffered fewer loan losses in an economy rebounding from the worst of the pandemic recession .
The quarterly results showed a markedly different narrative for the bank, which had struggled for years with high costs and low profits as it faced heavy fines and problems with regulators on issues such as manipulation of benchmarks, lax protections against money laundering and the sale of mortgage bonds. it went wrong.
CEO Christian Sewing led a two-year effort to exit riskier lines of business, cut costs and restore stable profitability. The bank was able to report stronger earnings and progress in losing risky assets on Wednesday at a time when rivals such as Credit Suisse, UBS and Nomura have to explain losses linked to the collapse of hedge fund Archegos Capital Management. Deutsche Bank – at the forefront of past scandals like the subprime US mortgage bond scandal – this time appears to be among the financial institutions that have avoided serious trouble.
Profit attributable to shareholders of Deutsche Bank amounted to 908 million euros ($ 1.1 billion) in the first three months of the year. This compared to a loss of 43 million euros over the period of the previous year. Premium income rose 14% to 7.23 billion euros.
Asked on a conference call with reporters whether the bank is now less risky and ‘boring’, CFO James von Moltke said that ‘we have no hesitation in calling something’ boring ‘desirable for the company. “He said the bank was” very focused on managing risk and we were very, very happy to see that it pays dividends in terms of being able to handle this particular situation. ”
He said the bank “takes no pleasure” in competitor’s concerns about “an adverse event in the industry.”
Among the factors that helped to improve the result was the release of money that had been set aside to cover loans that should not be repaid. Provisions for bad debts fell 86 percent to just 69 million euros in the first quarter from 506 million euros last year, reflecting what the bank called “an improved macroeconomic outlook.”
The bank said on Wednesday it had reduced its cost base for 13 consecutive quarters and its internal workforce to 84,400, down 2,300 from a year ago.
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