Troubled German lender, Deutsche Bank has published its financial results for the third quarter of 2019, revealing an €832 million ($924.35 million) loss for the quarter, driven by costs of its major restructuring.
Earlier this year in July, Deutsche Bank announced that it was going to commence a major restructuring, cutting 18,000 jobs and costing the bank €7.4 billion. Because of this, the firm has cautioned market participants that it would lose money this year.
Although the third-quarter loss is the second consecutive quarterly loss for Deutsche, it is worth noting that it is considerably less than the €3.15 billion loss in the previous quarter. Nonetheless, year-on-year, it’s still down from the €229 million net profit made in Q3 of 2018.
In terms of revenues, the bank reported total net revenues of €5.26 billion. This represents a 15 percent drop when measured against the total net revenues of €6.18 billion in the third quarter of 2018. According to the report, the most significant driver of this development was the firm’s strategic decision to exit Equities Sales & Trading.
Investment bank revenues fall 5%
Taking a look at the performance of the investment bank, net revenues fell by 5 percent year-on-year to reach €1.65 billion, and fixed income & currency (FIC) sales and trading revenues came in at €1.20 billion.
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For the segment, financing revenues grew on the back of increased client activity, with loan growth of €4 billion during the quarter, and €12 billion year-on-year in focused segments across FIC.
During the quarter, foreign exchange (forex) revenues declined slightly, with continued levels of low market volatility being partially offset with corporate-related flows. Revenues in rates and emerging markets debt, however, declined significantly, due to the company’s business restructure and challenging market conditions, the report said.
Despite the fact that Deutsche Bank reported a sizeable loss for the quarter, overall, the tone of the report was largely positive, with the company stating that its transformation is on track.
Commenting on the results, Christian Sewing, the Chief Executive Officer, said: “Despite having launched the most comprehensive restructuring of our bank in two decades, we delivered profits in our four core businesses during the quarter and grew loans and assets under management.”
“Transformation is fully underway with tangible progress on costs and de-risking. A 13.4% CET1 ratio underlines our strength. I want to thank our employees for their strong performance and commitment during this period of change, and our clients for the strong vote of confidence in our new strategy.”