Deutsche Bank plans to make profits in 2018 despite sharp decline in the third quarter

FRANKFURT (Reuters) – Deutsche Bank (DBKGn.DE) said Wednesday that he was poised to make a profit this year, its first since 2014, despite a sharp drop in third-quarter earnings following its restructuring under new leadership.

The leading German lender is trying to rebound after three consecutive years of losses and a series of negative stocks earlier this year, including a sudden reshuffle of management, a downgrade from Standard & Poor's and the failure of the firm's stress test. the US Federal Reserve.

The bank said it was progressing, although it pointed out the impossibility of reducing revenues.

"We control our costs and have enough capital to grow. We are on track to be profitable in 2018, for the first time since 2014, "said CEO Christian Sewing on Wednesday.

Deutsche shares were expected to start trading up 0.9%.

The bank recorded a 65% decline in net income in the third quarter. Net profit came to 229 million euros, down from 649 million euros a year ago, but still exceeds the 149 million euros expected in a survey conducted by Reuters analysts.

Revenue for the quarter was 6.175 billion euros, down 9 percent from 6.776 billion a year ago.

The quarter was marked by continued weakness in key trading activities and reduced volatility. Revenue from its cash cow bond trading division dropped by 15%, while equity trading income also fell by 15%.

"We have not yet made a recovery in terms of revenue," wrote Sewing in a memo to staff. "We must therefore continue our efforts to increase revenues from our activities."

For 2018, Deutsche anticipates that the turnover will be slightly lower than that of 2017 due to the restructuring of its investment banking business.

Sewing resumed work in April and has embarked on projects to remove more than 7,000 jobs as part of a revamp of the bank.

The end-of-quarter workforce was 94,717, down about 700 during the quarter.

In contrast to the decline in Deutsche's quarterly earnings, some large US banks posted significant gains. Goldman Sachs (GS.N) recorded a 20.5% increase in quarterly earnings, with growth in its equity and underwriting activities offsetting the decline in fixed income trading activity.

Deutsche shares are down 41% so far this year.