Deutsche Bank makes biggest annual profit in a decade on strong performance

Deutsche Bank made its biggest profit since 2011 last year, after it defied expectations for a loss in the fourth quarter following revenue gains at its investment bank during a dealmaking boom.

The result was the second straight annual profit following years of losses. The fourth quarter was the sixth consecutive in the black, the bank’s longest such streak since 2012.

Thursday’s figures are a milestone for Chief Executive Officer Christian Sewing, who was promoted to the top job in 2018 to turn Deutsche around after a series of embarrassing and costly regulatory failings, including over money laundering.

“This year we can finally prove to the market that we are sustainably profitable,” Sewing said in a message to employees.

The net profit attributable to shareholders was 145 million euros ($163 million) in the three months ended Dec. 31. That compares with a profit of 51 million euros a year earlier, and topped analyst expectations for a loss of around 130 million euros.

For the year, Deutsche made a profit of 1.94 billion euros, up sharply from 113 million euros a year earlier.

Sewing confirmed the bank was on track to achieve a key profitability target in 2022, a return on tangible equity of 8% that many analysts have forecast the bank will miss.

Despite the annual profit, the bank has still lost more than 10 billion euros over the past decade.

Analysts expect Deutsche to deliver profits in 2022 and 2023, consensus forecasts of their estimates shows.

Once Deutsche’s sore spot, the investment bank has become an important revenue generator, benefiting from a pandemic-induced trading boom and a wave of dealmaking that has lifted banks across Wall Street.

Revenue at the unit rose 1% to 1.913 billion euros in the fourth quarter from a year earlier.

The investment bank’s advisory business stood out amid a dealmaking boom, with revenue surging 156%.

Revenue for fixed-income and currency trading, one of the bank’s largest divisions, fell 14% from a strong period a year earlier as markets calmed from their pandemic trading frenzy.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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