Deutsche Bank reports solid results, firm outlook

26th July 2011, Comments 0 comments

Germany's biggest bank, Deutsche Bank, posted solid results on Tuesday despite the eurozone debt crisis and looked ahead with confidence after naming two successors to board chairman Josef Ackermann.

Deutsche Bank reported a second-quarter net profit of 1.2 billion euros ($1.7 billion) after taking a charge of 155 million euros stemming from the debt crisis.

The bank's net result marked an increase of 6.2 percent from the figure for the same period in 2010 but it did not change its previous forecasts for the year as a whole.

"Despite increasingly difficult market conditions, our business model has proven to be robust," chairman Josef Ackermann was quoted by a statement as saying.

"Our efforts to recalibrate and rebalance our platform are paying off nicely," he added in reference to improved results at the private client and asset management units and the purchase of Postbank, which has Germany's largest retail banking network.

On Monday, Deutsche Bank announced that Ackermann, who is Swiss and 63, would move to the supervisory board after he steps down in May 2012 and be replaced by two men, Indian-born Anshu Jain and German Juergen Fitschen.

Jain, 48, and Fitschen, 62, are expected to work along operational and relational lines, with the former handling daily business and strategy and the latter spearheading contacts with German politicians and the public.

Deutsche Bank is by far the biggest German bank, with total assets of 1.85 trillion euros at the end of the second quarter, more than two-thirds of Germany's forecast total output for this year of 2.59 trillion euros.

Jain has been head of the bank's core corporate and investment banking division from London since 2004, initially sharing that role as well, while Fitschen has been chief of the German operations.

Under Jain's direction, the CIB unit has become one of the world leaders in equities and fixed income management.

Turning back to second quarter results, Deutsche Bank's core pre-tax income rose to 1.8 billion euros, a gain of 17 percent on the year.

It took 464 million euros in provisions against risky loans, compared with 243 million a year earlier, with the latest amount including 182 million euros at Postbank.

Deutsche Bank gave its total exposure to debt in Greece, Ireland, Italy, Portugal and Spain as 3.7 billion euros on June 30.

European banks have agreed to participate in a second rescue plan for Greece but few have provided details on how much they are willing to stump up so far.

The group's core Tier One ratio, a measure of its ability to withstand unexpected shocks to the financial sector, gained 1.5 percentage points to 10.2 percent, its highest level ever, the statement said.

A breakdown of the data showed that Jain's CIB unit contributed 4.9 billion euros in net revenues to the group's total of 8.5 billion euros, marking annual increases of 4.25 percent and 19 percent, respectively.

Finally, figures for the first half of 2011 put group net income at 3.4 billion euros, up from 2.9 billion in the same period a year earlier.

© 2011 AFP

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