Deutsche Bank swings to annual profit and beats expectations

Deutsche Bank on Thursday beat earnings expectations for 2020, as evidenced by the coronavirus crisis, led by a strong performance in its investment banking division.

Germany’s largest credit provider posted a net profit of 113 million euros ($ 135.7 million) for the full year, while analysts expected a loss of 201 million euros, according to Refinitiv. Deutsche reported a loss of 5.7 billion euros for 2019 because it has undergone a major restructuring.

The bank makes a profit of 51 million euros for the fourth quarter, compared to analysts’ expectations of a loss of 325 million euros.

The bank’s chief financial officer, James von Moltke, told CNBC shortly after the announcement that he had achieved all his goals for the year.

Higher revenues and cost reductions helped to perform well in Deutsche’s investment banking division, with net revenue rising 32% in 2020 to 9.8 billion euros.

This has offset an increase in the provision for credit losses due to COVID-19, ‘the bank said in a statement.

Here are the other highlights:

• The total net income of the fourth quarter was 5.5 billion euros, compared to 5.35 billion euros for the same period in 2019, which brought the group’s net income for the year to 24 billion euros, by 4% compared to 2019.
• The equity ratio tier 1 (CET1) – a measure of the bank’s solvency – was 13.6%, unchanged in the fourth quarter of 2019.
• The provision for loan losses in the fourth quarter was 251 million, compared to 723 million in the last quarter of 2019.

“In the key year of our transformation, we have been able to more than offset transformation-related bonds and increased credit – despite the global pandemic,” CEO Christian Sewing said in the earnings report.

“We have built solid foundations for sustainable profitability and are confident that this overall positive trend will continue into 2021, despite these challenging times.”

This is a striking story. Come check back later for more information.