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Deutsche Bank (DB) Reports Q2 Loss on Lawsuit Provision
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Deutsche Bank (DB - Free Report) reported a second-quarter 2024 loss attributable to its shareholders of €143 million ($155.6 million) against the year-ago reported profit attributable to shareholders of €763 million ($830.7 million).
The Germany-based lender reported a profit before tax of €411 million ($477.5 million), down 71% year over year. Excluding a provision of €1.3 billion ($1.41 billion) for litigation related to the Postbank takeover, the bank reported a profit before tax of €1.7 billion ($1.9 billion).
Results were negatively impacted by an increase in expenses and a rise in provision for credit losses. This led investors to turn bearish on the stock, resulting in a decline of nearly 6%. However, an increase in commissions and fee income and stable net interest income acted as a tailwind.
Revenues & Expenses Increases
The bank generated net revenues of €7.6 billion ($8.26 billion), up 2% year over year. This upside was primarily driven by double-digit growth in commissions and fee income and stable net interest income.
Non-interest expenses of €6.7 billion ($7.3 billion) increased 20% from the prior-year quarter’s tally.
Provision for credit losses was €476 million ($474.9 million), up 19% from the prior-year quarter’s figures.
Segmental Performance
Corporate Bank: Net revenues of €1.92 billion ($2.07 billion), down 1% year over year. The result was due to lower net interest income, a decline in loan net interest income and the discontinuation of minimum reserve remuneration by the European Central Bank, partially offset by a rise in commissions and fee income.
Investment Bank: Net revenues totaled €2.6 billion ($3.26 billion), up 10% year over year. The upside was primarily driven by a doubling of Origination & Advisory revenues.
Private Bank: Net revenues of €2.33 billion ($2.50 billion) declined 3% year over year. Lower revenues in Personal Banking primarily led to the downtick.
Asset Management: Net revenues of €663 million ($721.8 million) rose 7% year over year. An increase in management fees led to the rise.
Corporate & Other: It reported net revenues of €73 million ($79.4 million), down 15% year over year.
Capital Position Deteriorate
Deutsche Bank’s Common Equity Tier 1 capital ratio was 13.5% as of Jun 30, 2024, down from the year-ago quarter’s 13.8%.
The leverage ratio on a fully-loaded basis was 4.6%, down from the year-ago quarter's 4.7%.
Share Repurchase Update
On Jul 12, 2024, the bank completed its €675-million ($734.9 million) share repurchase program, taking total capital distributions, including the bank’s 45 cents per share dividend paid in May 2024, to €1.6 billion ($1.74 billion) in 2024 to date.
Our Viewpoint
Deutsche Bank’s revenues improved driven by the Asset Management and Investment Bank segments’ performances from the prior-year quarter’s tally. The bank’s rise in commissions and fee income is an added positive. However, it registered a loss in the reported quarter due to the Postbank litigation provision.
Deutsche Bank Aktiengesellschaft Price, Consensus and EPS Surprise
Barclays PLC (BCS - Free Report) is scheduled to release quarterly numbers on Aug 1.
The Zacks Consensus Estimate for BCS’s quarterly earnings has been constant at 40 cents per share over the past 7 days. The estimate indicates a decline of 6.9% from the prior-year quarter reported number.
ICICI Bank (IBN - Free Report) is expected to report quarterly results on Jul 26.
Over the past seven days, the Zacks Consensus Estimate for IBN’s quarterly earnings has remained unchanged at 34 cents per share, implying a 3% year-over-year rise.
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Deutsche Bank (DB) Reports Q2 Loss on Lawsuit Provision
Deutsche Bank (DB - Free Report) reported a second-quarter 2024 loss attributable to its shareholders of €143 million ($155.6 million) against the year-ago reported profit attributable to shareholders of €763 million ($830.7 million).
The Germany-based lender reported a profit before tax of €411 million ($477.5 million), down 71% year over year. Excluding a provision of €1.3 billion ($1.41 billion) for litigation related to the Postbank takeover, the bank reported a profit before tax of €1.7 billion ($1.9 billion).
Results were negatively impacted by an increase in expenses and a rise in provision for credit losses. This led investors to turn bearish on the stock, resulting in a decline of nearly 6%. However, an increase in commissions and fee income and stable net interest income acted as a tailwind.
Revenues & Expenses Increases
The bank generated net revenues of €7.6 billion ($8.26 billion), up 2% year over year. This upside was primarily driven by double-digit growth in commissions and fee income and stable net interest income.
Non-interest expenses of €6.7 billion ($7.3 billion) increased 20% from the prior-year quarter’s tally.
Provision for credit losses was €476 million ($474.9 million), up 19% from the prior-year quarter’s figures.
Segmental Performance
Corporate Bank: Net revenues of €1.92 billion ($2.07 billion), down 1% year over year. The result was due to lower net interest income, a decline in loan net interest income and the discontinuation of minimum reserve remuneration by the European Central Bank, partially offset by a rise in commissions and fee income.
Investment Bank: Net revenues totaled €2.6 billion ($3.26 billion), up 10% year over year. The upside was primarily driven by a doubling of Origination & Advisory revenues.
Private Bank: Net revenues of €2.33 billion ($2.50 billion) declined 3% year over year. Lower revenues in Personal Banking primarily led to the downtick.
Asset Management: Net revenues of €663 million ($721.8 million) rose 7% year over year. An increase in management fees led to the rise.
Corporate & Other: It reported net revenues of €73 million ($79.4 million), down 15% year over year.
Capital Position Deteriorate
Deutsche Bank’s Common Equity Tier 1 capital ratio was 13.5% as of Jun 30, 2024, down from the year-ago quarter’s 13.8%.
The leverage ratio on a fully-loaded basis was 4.6%, down from the year-ago quarter's 4.7%.
Share Repurchase Update
On Jul 12, 2024, the bank completed its €675-million ($734.9 million) share repurchase program, taking total capital distributions, including the bank’s 45 cents per share dividend paid in May 2024, to €1.6 billion ($1.74 billion) in 2024 to date.
Our Viewpoint
Deutsche Bank’s revenues improved driven by the Asset Management and Investment Bank segments’ performances from the prior-year quarter’s tally. The bank’s rise in commissions and fee income is an added positive. However, it registered a loss in the reported quarter due to the Postbank litigation provision.
Deutsche Bank Aktiengesellschaft Price, Consensus and EPS Surprise
Deutsche Bank Aktiengesellschaft price-consensus-eps-surprise-chart | Deutsche Bank Aktiengesellschaft Quote
The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Earnings Release Dates of Other Foreign Banks
Barclays PLC (BCS - Free Report) is scheduled to release quarterly numbers on Aug 1.
The Zacks Consensus Estimate for BCS’s quarterly earnings has been constant at 40 cents per share over the past 7 days. The estimate indicates a decline of 6.9% from the prior-year quarter reported number.
ICICI Bank (IBN - Free Report) is expected to report quarterly results on Jul 26.
Over the past seven days, the Zacks Consensus Estimate for IBN’s quarterly earnings has remained unchanged at 34 cents per share, implying a 3% year-over-year rise.