Deutsche Bank Expects PBT of €206 Million in Q1 of 2020

In the fourth quarter of last year, the bank reported a pre-tax loss of €1.3 billion.

On Sunday Deutsche Bank sent out an ad-hoc release of its financial performance for the first quarter of 2020 in an attempt to address media reports that it experienced a loss for the three month period.

Yesterday’s announcement, which came three days before the German lender is set to release its full financial results for the first quarter, shows that the bank actually expects to report group profit before tax of €206 million, as opposed to the reported pre-tax loss of €1.3 billion in the fourth quarter of last year.

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Net income for the three-month period is expected to come in at €66 million, which is above market expectations, as is profit before tax. For the same period, the German lender says revenues are planned to be at €6.4 billion and non-interest expenses at €5.6 billion.

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Deutsche Bank CEO: we are satisfied with Q1 performance

Christian Sewing, Chief Executive Officer, said: “We’re very satisfied that our first-quarter results demonstrate the progress we’re making with the transformation of our bank, the operating strength of our business, and our resilience. We owe this to the outstanding efforts of our staff. 

“We are firmly committed to mobilising our balance sheet to support our clients, who need us now even more. Our decision to do so means that our Common Equity Tier 1 ratio may temporarily dip below our target minimum of 12.5%, without weakening our strong balance sheet. With our current ratio of 12.8%, we are comfortably above our minimum requirement of 10.4%. We’re convinced that this is in the best interests of all our stakeholders.”

In a Q&A sent out the Monday, Deutsche Bank clarified the reason why it sent out this ad-hoc release three days before the publication of its Q1 2020 results. According to the bank, it wanted to address uncertainties around market expectations on the bank’s earnings and media reports on a loss in the quarter.

“Furthermore, it is possible that the bank will fall modestly and temporarily below its previous CET 1 target of at least 12.5% and the fully-loaded leverage ratio target of 4.5 percent by the end of 2020. As we are obliged to inform the market immediately about changes to communicated targets, we published an ad hoc release on Sunday night,” Deutsche Bank said in the statement.

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