Deutsche Bank posts Q1 loss as virus bites

A statue is pictured next to the logo of Germany's Deutsche Bank in Frankfurt September 30, 2016. — Reuters pic
A statue is pictured next to the logo of Germany's Deutsche Bank in Frankfurt September 30, 2016. — Reuters pic

FRANKFURT, April 29 — Deutsche Bank today posted a €43 million (US$46 million) loss in the first quarter despite a strong performance from its investment unit as Germany’s biggest lender grapples with a major revamp and the coronavirus fallout.

The net loss attributable to shareholders compared to a profit of €97 million over the same period a year earlier, but was still better than analysts had predicted.

Deutsche Bank had earlier said it was expecting a €66-million  profit for the first three months, before a large bond coupon payment pushed the lender into the red.

Group revenues were flat at €6.4 billion amid a tough global environment for banks, thanks in part to Deutsche’s long-struggling investment arm where turnover climbed 18 per cent to 2.3 billion.

“In the current crisis, we have shown robust numbers and demonstrated strong performance in support of our clients across all core businesses,” said CEO Christian Sewing.

The bank said it has set aside €506 million provisions to deal with credit losses, around half of which it predicts will be “due to Covid-19”.

The coronavirus pandemic has battered the global economy and companies around the world are struggling to survive as efforts to curb the outbreak force them to close their doors or limit operations.

Governments and central banks have launched massive stimulus programmes to encourage lenders to keep credit flowing to companies and households throughout the crisis.

In partially released earnings results last Sunday, Deutsche Bank said it had made the decision to allow capital “to fall modestly and temporarily below its target” to support clients through the turmoil.

Deutsche, which posted its fifth consecutive annual loss in 2019, had already embarked on a major restructuring to return to profitability before the coronavirus deepened the sector’s woes.

The overhaul calls for Deutsche to retreat from some activities and regions of the world it ventured into during breakneck expansion prior to the financial crisis.

Instead, bosses want to refocus the bank on its business with corporate clients and its home region of Europe.

Thousands of jobs are set to be scrapped under the revamp.

Deutsche said it had just over 86,600 full-time employees at the end of the first quarter, some 4,800 fewer than a year earlier.

The bank did not provide a full-year outlook. — AFP

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