The greatest lender in Germany Deutsche Bank Thursday, pointed out a lower than expected profit on Thursday, which has dropped sharply in the last three months of 2024, while the legal provisions weighed on the results.
The Banque Frankfurt shares fell 4.95% at 08:24, time in London after the results press release.
The net profit attributable to shareholders reached 106 million euros ($ 110.4 million) in the fourth quarter, compared to forecasts of 282.39 million euros in an LSEG poll of analysts. The result marked a significant drop compared to the 1.461 billion euros obtained in the third quarter.
The full net profit of the anchored year attributable to shareholders came to 2.698 billion euros, down 36% compared to 2023.
Revenues reached 7.224 million euros in the fourth quarter, against an LSEG analyst survey of 7.125 billion euros – but was eroded by dispute costs during the period up to 594 million euros. The turnover of 2024 from the year to the annual year increased by 4% over one year to 30.1 billion euros.
The financial director of Deutsche Bank, James Von Moltke, admitted that the bank had “a very high level of non -operational costs in 2024.
“We are not satisfied with punctual expenses or surprises and most of these things have really been … The problems resulting from the past, sometimes the distant past, the post-banking control dispute in 2024 is a good example . Which, on a clear basis, represents approximately 900 million costs in ’24, “said Von Moltke in Annette Weisbach of CNBC in an interview on Thursday.
“So, in a sense, the only good news you can say on this subject: it is behind us. And above all, therefore, the risk profile of the company is radically modified,” he added
The bank said it is now targeting an expensive income ratio less than 65% this year, against an initial target of less than 62.5%. Despite the drop in quarterly profits, the Deutsche Bank also launched a share buyback of 750 million euros.
The other strengths of the fourth quarter included:
- Benefit before tax of 583 million euros, down 17% in annual shift;
- Provision for credit losses of 420 million euros, down 14% in annual shift;
- The capital ratio this 1, a measurement of banking solvency was 13.8%, unchanged from the third quarter.
Deutsche Bank declared a rate of return after Tangible stock tax (Rote) of 4.7% over the entire year 2024, against 7.4% the previous year – and well below the lender of the lender More than 10% per Rote this year.
Investment banking income shines in the fourth quarter
The drop in the benefit of the fourth quarter marks a setback for the lender, who had returned to Black in the third quarter, after having broken his profits sequence with a loss of 143 million provision for disputes on his post-banque division. The Deutsche Bank previously launched a disc of 2.5 billion Uro costs after having reached a post-Finanity crisis in 2019 which crowned a decade of low profits, the shares gradually gaining ground to add more than 30% L ‘last year.
Previously supported by buyouts and a high interest rate environment, European banks must now face the partial loss of this support while the European Central Bank continues the cycle of relaxation of monetary policy from last year . The ECB should largely reduce rates at its meeting later in the Thursday session.
“The strong rear wind of higher interest rates has ended. We think that banks focus more on income based on costs rather than income from net interest and those who have a potential for mergers and Acquisitions are better placed for 2025. This includes banks in Germany, Italy, Spain and France, “noted analysts in their report Bank Quinok 2025 published in November.
Deutsche Bank, for its part, recently experienced solid performance of its investment banking operations – a main engine of its third quarter income and a basic growth pillar during the period. Revenues from the investment banking unit increased by 30% in annual sliding to 2.4 billion euros in the fourth quarter, also increasing by 15% in annual sliding to 10.6 billion euros in 2024.
German banks have also joined the storm of an attenuated perspective for the greatest European economy this year, as well as political volatility before the next general elections in February.
“We also share the frustration which, I think, is quite omnipresent in Europe, which growth has relatively stagnated in the past two years while Europe has worked on a certain number of articles, energy costs, the Inflation, the interest rate cycle and what you have, “said Von Moltke Thursday at CNBC. “We would like to see a political mix that focuses on growth and competitiveness in Europe.”
At the national level, the Deutsche Bank could benefit from the uncertainty surrounding the fate of the second German lender Commerzbank, in which Unicredit d’Italie has built a stake since September, storing the speculation of a potential takeover.
