Deutsche Bank posts biggest annual profit in 15 years

Germany’s Deutsche Bank on Thursday said it booked its highest annual profit since 2007 last year, thanks to higher interest rates and a major cost-cutting drive.

The bank recorded a 5.03-billion-euro ($5.5 billion) net profit for 2022, up from 1.9 billion euros a year earlier.

The strong showing includes a one-off tax benefit of 1.4 billion euros in the United States, Deutsche said.

“Over the past three and a half years we have successfully transformed Deutsche Bank,” CEO Christian Sewing said in a statement.

Germany’s largest lender embarked on a strategic overhaul in 2019 that included thousands of job cuts and a bigger focus on Europe.

After years of losses, Deutsche returned to the black in 2020.

Full-year revenues for 2022 climbed to 27.2 billion euros, up seven percent on the previous year.

The increase was partly down to the European Central Bank’s interest rates hikes to combat inflation, which have ended years of ultra-low rates that had squeezed eurozone banks’ income.

Other banks in Europe have benefited from higher borrowing costs, with Spain’s Banco Santander reporting on Thursday a record net profit of 9.6 billion euros.

Deutsche’s earnings were also driven by double-digit revenue growth in its corporate and private banking divisions.

The key investment banking arm performed less well, climbing by just four percent year-on-year amid lower advisory fees in the industry.

An uncertain economic outlook, fuelled by the war in Ukraine and fears of a downturn in Europe, led Deutsche to set aside loss provisions of 1.2 billion euros last year, compared with 515 million euros in 2021.

Sewing said he expected Deutsche’s revenues to increase in 2023, to between 28 and 29 billion euros, while costs would stay roughly stable.

The group’s costs still need to come down by “more than two billion euros” by 2025, Sewing told a press conference, without ruling out further job cuts.

The bank has already shed nearly 10,000 jobs since 2019. It currently has a global workforce of around 85,000.

Deutsche’s share price fell by 2.3 percent to 11.97 euros in mid-day trading in Frankfurt. — Agence France-Presse