1. Deutsche Bank Q1 profit surges on debt trading

Deutsche Bank Q1 profit surges on debt trading

Deutsche Bank posted a 143 percent rise in first-quarter net profit to 575 million euros ($627 million), benefiting from lower legal costs for past misdeeds and a rebound in debt trading.

By: | Frankruft | Updated: April 27, 2017 12:05 PM
Our cost-cutting efforts are starting to pay off, while we have reduced complexity significantly”, Chief Executive John Cryan said in a statement on Thursday. (Reuters)

Deutsche Bank more than doubled its first-quarter net profit to 575 million euros ($627 million), benefiting from lower legal costs for past misdeeds and a rebound in debt trading. Germany’s flagship lender beat expectations of analysts who had expected the bank to post a first-quarter net profit of 522 million euros. “Client engagement is strong, asset flows are returning across the bank and activity is picking up. Our cost-cutting efforts are starting to pay off, while we have reduced complexity significantly,” Chief Executive John Cryan said in a statement on Thursday.

The bank’s litigation reserves decreased to 3.2 billion euros in the quarter, after it had booked record fourth-quarter sums for settlements such as over the sale of toxic mortgages and sham Russian trades. Provisions for possible future legal action were flat at 2.4 billion euros.

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Earlier this month, the U.S. Federal Reserve fined Deutsche Bank $157 million for violating foreign exchange rules and running afoul of the so-called Volcker Rule on speculative investments, leaving a probe into sanctions violations as the only large remaining litigation issue.

Revenues at Deutsche Bank’s cash-cow bond-trading division were up 11 percent in the quarter as it benefited from a surge in trading across interest rate products, commodities and foreign exchange (FICC), while sales were down 10 percent in equity trading. Total revenues were down 9 percent at 7.3 billion euros in the quarter. The bank’s core tier 1 equity ratio rose to 14.1 percent from 10.7 percent a year earlier, strengthened by an $8.5 billion cash call earlier this month.

 

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