Deutsche Bank Income down 30% in Q1 2014, FX Revenues “Significantly Lower”
- Deutsche Bank Q1 Net Income before taxes declined 30% to €1.7 billion from the same period in 2013. Performance was affected by among items, what the bank called "significantly lower" revenues in Foreign Exchange.
Deutsche Bank issued its Q1 2014 figures today. In the quarter, net income before taxes declined 30% to €1.7 billion from the same period in 2013. The earnings contraction took place as total net revenues fell 11% to €8.4 billion. Among weaker performers, Corporate Banking and Securities suffered the largest fall as group revenues declined by €471 million to €4.076 billion. Commenting on the decline, Deutsche Bank singled out Sales and Trading as they stated, “The decrease was mainly attributable to reduced revenues in Sales & Trading (debt and other products), which were down by EUR 285 million, or 10 %, compared to Q1 2013, resulting from lower client activity reflecting low volatility and ongoing uncertainty around emerging markets.”
FX “Significantly Lower”
Within Sales and Trading, Deutsche Bank reported performance declines among various units, among them, FX, Credit Solutions, Commercial Real Estate and Emerging Markets. However, of the units FX was specifically mentioned as experiencing weakness as the bank stated, “Revenues in Foreign Exchange were significantly lower than the prior year quarter due to lower client activity reflecting lower volatility and challenging trading environment.” Year-over-year comps in FX were also made more difficult due to Q1 last year being specifically active in the overall sector.
The decline in FX at Deutsche Bank follows a similar performance that was experienced in the second half of 2013. Despite a strong start to 2013, in its Annual Report Deutsche Bank reported that FX revenues declined during the year. The bank blamed margin compression taking place, which mitigated improvements in trading volumes.
In our just published Forex Magnates Q1 Industry Report, among topics was a look at dealer FX Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term and its connection to Fixed Income trading. The report analyzed whether FX pricing was being adversely affected by a decline in Fixed Income revenues during the second half of 2013. Among sources that Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term Magnates contacted, the prevalent opinion was that spreads had remained tight, with several firms seeing pricing become even more competitive. Overall, as FX liquidity is becoming commoditized, it has created fewer pockets of weak pricing in the market, with nearly every region in the world able to source competitive spreads. However, as seen in Deutsche Bank’s results, even as FX volumes rose in 2013, the buyer’s market has created a difficult environment for primary dealers to succeed in.
Deutsche Bank issued its Q1 2014 figures today. In the quarter, net income before taxes declined 30% to €1.7 billion from the same period in 2013. The earnings contraction took place as total net revenues fell 11% to €8.4 billion. Among weaker performers, Corporate Banking and Securities suffered the largest fall as group revenues declined by €471 million to €4.076 billion. Commenting on the decline, Deutsche Bank singled out Sales and Trading as they stated, “The decrease was mainly attributable to reduced revenues in Sales & Trading (debt and other products), which were down by EUR 285 million, or 10 %, compared to Q1 2013, resulting from lower client activity reflecting low volatility and ongoing uncertainty around emerging markets.”
FX “Significantly Lower”
Within Sales and Trading, Deutsche Bank reported performance declines among various units, among them, FX, Credit Solutions, Commercial Real Estate and Emerging Markets. However, of the units FX was specifically mentioned as experiencing weakness as the bank stated, “Revenues in Foreign Exchange were significantly lower than the prior year quarter due to lower client activity reflecting lower volatility and challenging trading environment.” Year-over-year comps in FX were also made more difficult due to Q1 last year being specifically active in the overall sector.
The decline in FX at Deutsche Bank follows a similar performance that was experienced in the second half of 2013. Despite a strong start to 2013, in its Annual Report Deutsche Bank reported that FX revenues declined during the year. The bank blamed margin compression taking place, which mitigated improvements in trading volumes.
In our just published Forex Magnates Q1 Industry Report, among topics was a look at dealer FX Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term and its connection to Fixed Income trading. The report analyzed whether FX pricing was being adversely affected by a decline in Fixed Income revenues during the second half of 2013. Among sources that Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term Magnates contacted, the prevalent opinion was that spreads had remained tight, with several firms seeing pricing become even more competitive. Overall, as FX liquidity is becoming commoditized, it has created fewer pockets of weak pricing in the market, with nearly every region in the world able to source competitive spreads. However, as seen in Deutsche Bank’s results, even as FX volumes rose in 2013, the buyer’s market has created a difficult environment for primary dealers to succeed in.