DEUTSCHE BANK CONFOUND EXPECTATIONS BY REPORTING A PROFIT
Deutsche Bank has reported a small third-quarter profit, beating very low expectations. The bank reported a profit of €278m (£248m), a big turnaround from a €6bn loss in the same period last year. Deutsche Bank said the “tough interest rate environment” and “unsettling effect” of negotiations with US authorities had been felt.
Concerns persist over the position of the bank as the size of a fine in the US remains undetermined. Deutsche has been threatened with a $14bn (£11.5bn) fine from the US Department of Justice over the mis-selling of mortgage-backed securities in the run-up to the financial crisis.
And earlier this year, the International Monetary Fund described it as the biggest risk to the global banking system. The bank has been cutting costs and selling businesses in attempt to reassure investors.
Chief executive John Cryan said that the bank’s restructuring work had been “overshadowed” by the attention being paid to the bank’s talks concerning the “matter” in the US.
“The bank is working hard on achieving a resolution of this issue as soon as possible,” he said.
But in a letter to staff he added that “unfortunately, we have to assume that the situation will stay difficult for a while”. Mr Cryan said the bank’s latest results demonstrated the strength of its operating business.
Deutsche Bank reported a 2% rise in sales in its third quarter to €7.5bn, which was better than analysts had been expecting.
“Deutsche has done better than anticipated, but that was against very low expectations, which has really been the banking story so far this quarter,” said Peter Hahn, a professor at the London Institute of Banking and Finance.