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Deutsche Bank and Barclays Soar in Q1, Report Net Income above Expectations

Thursday, 25/04/2024 | 06:43 GMT by Damian Chmiel
  • Both banks have implemented measures to improve efficiency and boost shareholder returns.
  • Barclays' net profit was about $600 million higher than Deutsche Bank's.
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Two of Europe's largest investment banks, Deutsche Bank and Barclays, have reported better-than-expected profit for the first quarter of 2024. Deutsche Bank increased its profit thanks to the reconstruction of its trading division, while Barclays returned to profit after a net loss of £111 million in the previous quarter.

Deutsche Bank Sees Highest Q1 Profit since 2013

Germany's Deutsche Bank announced a net profit attributable to shareholders of €1.275 billion ($1.365 billion) for the first quarter, marking an uplift of 10% compared to the same period last year.

This figure surpassed analysts' expectations of €1.23 billion and represents the bank's highest first-quarter profit since 2013. The bank's revenue also grew 1% year-on-year to €7.8 billion, driven by growth in commissions and fee income and strong performance in fixed income and currencies.

“This quarter we achieved double-digit profit growth, and our highest first quarter profit since 2013, through disciplined execution of our Global Hausbank strategy,” Christian Sewing, the Chief Executive Officer of Deutsche Bank, commented.

Deutsche Bank's investment banking division, which had experienced a slump of 9% in 2023, saw an increase of 13% in revenues to €3 billion, restoring its position as the bank's highest-earning unit.

“Our revenue and franchise momentum reflects our investments in capital-light businesses and close partnership across the Group to support clients,” James von Moltke, the bank’s Chief Financial Officer, added.

Barclays Returns to Profit amid Strategic Overhaul

Meanwhile, UK-based Barclays reported a net income attributable to shareholders of £1.55 billion ($1.93 billion) for the first quarter, exceeding analysts' expectations of £1.29 billion. This marks a significant turnaround from the £111 million net loss the bank experienced in the fourth quarter of 2023 due to a major operational shake-up.

The strategic revamp to lower expenses and enhance efficiencies involved a £900 million charge due to structural cost reductions. The bank anticipates these actions will result in gross cost savings of approximately £500 million in 2024, achieving a return on investment in under two years.

“In Q124 Barclays delivered a RoTE of 12.3% as we progress towards our targets of >10% RoTE in 2024, and >12% in 2026,” C. S. Venkatakrishnan, the Group Chief Executive at Barclays, said.

As part of the overhaul, Barclays reorganized its business into five operating divisions: Barclays U.K., Barclays U.K. Corporate Bank, Barclays Private Bank and Wealth Management, Barclays Investment Bank, and Barclays U.S. Consumer Bank.

The bank committed to distributing £10 billion to its shareholders through dividends and share repurchases from 2024 to 2026.

The strong first-quarter results from both Deutsche Bank and Barclays demonstrate their ability to navigate challenging market conditions and execute strategic initiatives to enhance profitability and shareholder returns.

Two of Europe's largest investment banks, Deutsche Bank and Barclays, have reported better-than-expected profit for the first quarter of 2024. Deutsche Bank increased its profit thanks to the reconstruction of its trading division, while Barclays returned to profit after a net loss of £111 million in the previous quarter.

Deutsche Bank Sees Highest Q1 Profit since 2013

Germany's Deutsche Bank announced a net profit attributable to shareholders of €1.275 billion ($1.365 billion) for the first quarter, marking an uplift of 10% compared to the same period last year.

This figure surpassed analysts' expectations of €1.23 billion and represents the bank's highest first-quarter profit since 2013. The bank's revenue also grew 1% year-on-year to €7.8 billion, driven by growth in commissions and fee income and strong performance in fixed income and currencies.

“This quarter we achieved double-digit profit growth, and our highest first quarter profit since 2013, through disciplined execution of our Global Hausbank strategy,” Christian Sewing, the Chief Executive Officer of Deutsche Bank, commented.

Deutsche Bank's investment banking division, which had experienced a slump of 9% in 2023, saw an increase of 13% in revenues to €3 billion, restoring its position as the bank's highest-earning unit.

“Our revenue and franchise momentum reflects our investments in capital-light businesses and close partnership across the Group to support clients,” James von Moltke, the bank’s Chief Financial Officer, added.

Barclays Returns to Profit amid Strategic Overhaul

Meanwhile, UK-based Barclays reported a net income attributable to shareholders of £1.55 billion ($1.93 billion) for the first quarter, exceeding analysts' expectations of £1.29 billion. This marks a significant turnaround from the £111 million net loss the bank experienced in the fourth quarter of 2023 due to a major operational shake-up.

The strategic revamp to lower expenses and enhance efficiencies involved a £900 million charge due to structural cost reductions. The bank anticipates these actions will result in gross cost savings of approximately £500 million in 2024, achieving a return on investment in under two years.

“In Q124 Barclays delivered a RoTE of 12.3% as we progress towards our targets of >10% RoTE in 2024, and >12% in 2026,” C. S. Venkatakrishnan, the Group Chief Executive at Barclays, said.

As part of the overhaul, Barclays reorganized its business into five operating divisions: Barclays U.K., Barclays U.K. Corporate Bank, Barclays Private Bank and Wealth Management, Barclays Investment Bank, and Barclays U.S. Consumer Bank.

The bank committed to distributing £10 billion to its shareholders through dividends and share repurchases from 2024 to 2026.

The strong first-quarter results from both Deutsche Bank and Barclays demonstrate their ability to navigate challenging market conditions and execute strategic initiatives to enhance profitability and shareholder returns.

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About the Author: Damian Chmiel
Damian Chmiel
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About the Author: Damian Chmiel
Damian's adventure with financial markets began at the Cracow University of Economics, where he obtained his MA in finance and accounting. Starting from the retail trader perspective, he collaborated with brokerage houses and financial portals in Poland as an independent editor and content manager. His adventure with Finance Magnates began in 2016, where he is working as a business intelligence analyst.
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