Thursday 27 July 2017

Deutsche Bank CEO warns of deeper cuts after second quarter revenue drop

Deutsche Bank
Deutsche Bank

Deutsche Bank warned that deeper cuts may be needed to turn around the lender after revenues fell sharply in the second quarter as the low interest rate environment and volatile markets weighed on the business.

"If the current weak economic environment persists, we will need to be yet more ambitious in the timing and intensity of our restructuring," Chief Executive John Cryan said in a statement on Wednesday.

Shares were indicated to start trading 2.3 percent higher at the top of Germany's blue-chip DAX index.

Net profit dropped to 20 million euros ($22 million) in the second quarter, down from 798 in the year earlier period, but ahead of analysts' consensus for a net loss of 105 million euros.

Revenues were down 20 percent in the quarter, in part related to Britain's vote to leave the European Union, with the investment bank sliding 28 percent.

Deutsche Bank's cash cow bond trading activities decreased 19 percent, which it said was related to its decision to exit high-risk securitised trading and the rationalisation of its emerging market debt platform.

Revenues from its foreign exchange business was flat, helped by a burst in client demand for currencies in the wake of the Brexit vote.

Reuters

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