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Germany’s largest lender is under pressure to cut costs.
Photo:
luke macgregor/Reuters
Deutsche Bank
AG
said third-quarter profit fell 65% to €229 million ($263 million) as a slump in trading revenue hurt the underperforming German lender, which is under pressure to cut costs and stabilize earnings.
European banks are broadly expected to lag behind their U.S. peers, according to analysts. Expectations for Deutsche Bank are among the lowest as continental banks kicked off earnings season Wednesday.
Germany’s largest lender said third-quarter net revenue fell 9% to €6.2 billion from a year earlier, roughly in line with analysts’ expectations.
Analysts had expected Deutsche Bank’s companywide profit to fall while it slashes expenses following another management overhaul.
In April, the lender fired its CEO and replaced him with longtime executive Christian Sewing after three full-year post-tax losses and a series of restructurings that failed to deliver on cost-cutting promises.
Mr. Sewing said Wednesday that the bank’s pretax profit in the quarter—while lower—along with head count reductions and capital improvements, marked “another milestone” toward the company’s goals for sustained profitability. “We are on track to be profitable in 2018, for the first time since 2014,” he said in a statement.
Investment-banking revenue declined 13% from a year earlier to €3 billion. The lender suffered 15% declines in both fixed-income and equities sales and trading revenues from a year earlier.
Its other two primary business units, commercial and retail banking and asset management, also suffered quarterly revenue declines of 3% and 10%, respectively.
Broad investor support for Mr. Sewing’s early initiatives, including steep job cuts and a back-to-roots focus on European clients, hasn’t helped Deutsche Bank shares. They’ve fallen more than 40% this year, trading at multiyear lows near €9.30.
Write to Jenny Strasburg at [email protected]
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