Deutsche Bank Q3 2022 results

German Bank Wednesday crushed market expectations for the third quarter amid rising interest rates and market turbulence.

The bank reported net profit of 1.115 billion euros ($1.11 billion) for the quarter. Analysts had predicted a net profit of 827 million euros, according to Refinitiv data.

“We are seeing the interest rate advantages come through in our corporate banking and our private banking, basically those with large deposit books and we are seeing our FIC [fixed income and currencies] companies are handling this environment extremely well,” James von Moltke, chief financial officer of Deutsche Bank, told CNBC’s Joumanna Bercetche.

CEO Christian Sewing said in a statement that the bank was “on track” to meet its 2022 targets. Over the medium term, the bank said it aims to achieve returns on average tangible equity in excess of 10 % by 2025.

Here are some other highlights from the quarter:

  • Revenues increased by 15% compared to a year ago and reached 6.92 billion euros.
  • The Common Equity Tier 1 ratio, a measure of bank solvency, stood at 13.3% from 13% a year ago.

Deutsch Bank reported third quarter earnings.

Bloomberg | Bloomberg | Getty Images

Looking at the bank’s individual divisions, investment banking revenue was up 6% from a year ago. In particular, revenues from Fixed Income and Currencies increased by 38% over the same period and helped offset the decline in performance from Credit Trading.

Against this backdrop, the bank said origination and advisory revenue fell 85% year-over-year, indicating a drop in transactions, as has been the case with some of its US peers. .

Corporate banking, however, saw the biggest revenue increase of any division, up 25% from a year ago.

Deutsche Bank also said it further reduced its exposure to Russian credit over the same period. The bank severed its ties with Russia following Moscow’s unprovoked invasion of Ukraine. As a result, additional contingent risk fell to €0.2 billion from €0.6 billion at the end of the second quarter.

Higher interest rates for longer?

The German bank recorded higher provisions compared to the same quarter a year ago. These amounted to 350 million euros at the end of the third quarter, against 117 million euros at the same date last year.

The bank said this reflected “more difficult macroeconomic forecasts”. Speaking to CNBC, von Moltke reiterated his expectation of a recession in 2023 in Germany and the wider European market.

Deutsche Bank

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