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Deutsche Bank (DB) Shares up on Q3 Profit Rise, Costs Dip
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Deutsche Bank (DB - Free Report) reported a third-quarter 2022 profit attributable to its shareholders of €1.11 billion ($1.12 billion) compared with the year-ago quarter’s €194 million. The Germany-based lender reported a profit before taxes of €1.62 billion ($1.63 billion).
Shares of the company gained almost 1% in yesterday’s trading hours. This was largely due to higher net revenues and lower expenses. However, higher provision for credit losses was an offsetting factor.
Revenues & Provisions Rise, Costs Decrease
The bank generated net revenues of €6.92 billion ($6.97 billion) in the third quarter, up 15% year over year. The upside primarily resulted from higher revenues in all segments except for the Capital Release Unit.
Non-interest expenses of €4.95 billion ($4.98 billion) decreased 8% from the prior-year quarter.
Provision for credit losses was €350 million ($352.7 million) compared with the prior-year quarter’s €117 million.
Segmental Performances
Net revenues of €1.56 billion ($1.57 billion) at the Corporate Bank division were up 25% year over year. This growth was mainly driven by increases in net interest income, and commission & fee income.
Investment Bank’s net revenues totaled €2.37 billion ($2.38 billion), up 6% year over year. This highlights growth in fixed-income and currencies revenues, offset by a decline in origination and advisory revenues.
Private Bank reported net revenues of €2.26 billion ($2.28 billion), up 13% year over year. Higher net interest income, FX movements and continued new business volumes led to the upside.
Asset Management generated net revenues of €661 million ($666.1 million), up 1% year over year, mainly aided by increased management fees, as well as performance and transaction fees.
Corporate & Other reported negative net revenues of €71 million ($71.5 million) compared with €61 million in the prior-year period.
Capital Release reported negative net revenues of €17 million ($17.13 million) compared with €36 million in the year-ago quarter.
Capital Position Strengthens
Deutsche Bank’s Common Equity Tier 1 capital ratio was at 13.3% as of Sep 30, 2022, up from the year-ago quarter’s 13%. Risk-weighted assets were reduced sequentially by a billion to €24 billion ($23.51 billion).
The leverage ratio on a fully-loaded basis was 4.3%, down from 4.7% in the year-ago quarter.
Our Viewpoint
Deutsche Bank’s overall financial performance seems encouraging. Also, the performance of the bank significantly improved for the Corporate Bank, Investment Bank and Asset Management segments over the prior-year quarter. Reduction in costs will alleviate the bottom-line pressure.
Deutsche Bank Aktiengesellschaft Price, Consensus and EPS Surprise
HSBC Holdings (HSBC - Free Report) reported a third-quarter 2022 pre-tax profit of $3.1 billion, down 41.8% from the prior-year quarter.
Results reflected a rise in adjusted revenues. However, adjusted expenses increased from the year-ago quarter, which was a headwind for HSBC. Expected credit losses and other credit impairment charges were a net charge in the quarter under review against a release in the prior-year quarter.
UBS Group AG (UBS - Free Report) reported a third-quarter 2022 net profit attributable to shareholders of $1.73 billion, down 37.6% from the prior-year quarter.
UBS’ performance was affected by a fall in revenues and a decline in total net credit loss releases. Nonetheless, operating expenses decreased from the prior-year quarter.
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Deutsche Bank (DB) Shares up on Q3 Profit Rise, Costs Dip
Deutsche Bank (DB - Free Report) reported a third-quarter 2022 profit attributable to its shareholders of €1.11 billion ($1.12 billion) compared with the year-ago quarter’s €194 million. The Germany-based lender reported a profit before taxes of €1.62 billion ($1.63 billion).
Shares of the company gained almost 1% in yesterday’s trading hours. This was largely due to higher net revenues and lower expenses. However, higher provision for credit losses was an offsetting factor.
Revenues & Provisions Rise, Costs Decrease
The bank generated net revenues of €6.92 billion ($6.97 billion) in the third quarter, up 15% year over year. The upside primarily resulted from higher revenues in all segments except for the Capital Release Unit.
Non-interest expenses of €4.95 billion ($4.98 billion) decreased 8% from the prior-year quarter.
Provision for credit losses was €350 million ($352.7 million) compared with the prior-year quarter’s €117 million.
Segmental Performances
Net revenues of €1.56 billion ($1.57 billion) at the Corporate Bank division were up 25% year over year. This growth was mainly driven by increases in net interest income, and commission & fee income.
Investment Bank’s net revenues totaled €2.37 billion ($2.38 billion), up 6% year over year. This highlights growth in fixed-income and currencies revenues, offset by a decline in origination and advisory revenues.
Private Bank reported net revenues of €2.26 billion ($2.28 billion), up 13% year over year. Higher net interest income, FX movements and continued new business volumes led to the upside.
Asset Management generated net revenues of €661 million ($666.1 million), up 1% year over year, mainly aided by increased management fees, as well as performance and transaction fees.
Corporate & Other reported negative net revenues of €71 million ($71.5 million) compared with €61 million in the prior-year period.
Capital Release reported negative net revenues of €17 million ($17.13 million) compared with €36 million in the year-ago quarter.
Capital Position Strengthens
Deutsche Bank’s Common Equity Tier 1 capital ratio was at 13.3% as of Sep 30, 2022, up from the year-ago quarter’s 13%. Risk-weighted assets were reduced sequentially by a billion to €24 billion ($23.51 billion).
The leverage ratio on a fully-loaded basis was 4.3%, down from 4.7% in the year-ago quarter.
Our Viewpoint
Deutsche Bank’s overall financial performance seems encouraging. Also, the performance of the bank significantly improved for the Corporate Bank, Investment Bank and Asset Management segments over the prior-year quarter. Reduction in costs will alleviate the bottom-line pressure.
Deutsche Bank Aktiengesellschaft Price, Consensus and EPS Surprise
Deutsche Bank Aktiengesellschaft price-consensus-eps-surprise-chart | Deutsche Bank Aktiengesellschaft Quote
Deutsche Bank currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Foreign Banks
HSBC Holdings (HSBC - Free Report) reported a third-quarter 2022 pre-tax profit of $3.1 billion, down 41.8% from the prior-year quarter.
Results reflected a rise in adjusted revenues. However, adjusted expenses increased from the year-ago quarter, which was a headwind for HSBC. Expected credit losses and other credit impairment charges were a net charge in the quarter under review against a release in the prior-year quarter.
UBS Group AG (UBS - Free Report) reported a third-quarter 2022 net profit attributable to shareholders of $1.73 billion, down 37.6% from the prior-year quarter.
UBS’ performance was affected by a fall in revenues and a decline in total net credit loss releases. Nonetheless, operating expenses decreased from the prior-year quarter.