Stock market reports reporting season is taking off: Bayer top, German Bank flop
Frankfurt the German bank bad weeks behind it and the latest figures concerns the long-suffering investors can not dispel. In the second quarter, the largest domestic monetary House scored only a minimum net profit of 20 million euros. This corresponds to a just perceptible return on equity of 0.1 percent. By comparison, the previous year’s quarter the bank earned below the line EUR 818 million, in the first three months in 2016 there were 236 million euros.
The income shrank in the quarter by 20 percent to 7.4 billion euros, which returns the Institute on a difficult market environment, uncertainty after the British EU referendum and low interest rates. In addition, the Bank had deliberately shrunk divisions. All this affects it primarily to the major capital markets division (Global Markets), corporate finance and asset management. “The ongoing reorganization of the Bank is reflected in our results. But we are pleased with our progress, “said chief executive John Cryan. The Briton leads the Institute for a little over one year.
The pre-tax profit of 408 million euros for the months of April to June is two-thirds lower than in the previous year. The hard core capital ratio climbed slightly by 0.1 percentage point to 10.8 percent. Analysts had predicted a core capital ratio of 11.3 percent. The profit after tax, the bank meets in about the expectations of experts. They had on average predicted a net profit of eleven million euros. Nevertheless, the price of German bank shares on the Frankfurt Stock Exchange fell in the morning under fierce pressure. The title gave the tip by more than five percent to just under EUR 12.20.
Politics fears for Money house Great concern for the German bank
the win came into being but only because from April incurred barely legal costs until the end of June. In the second quarter they proposed only 120 million euro record – a year ago it was still ten times. The bank also benefited from the fact that the manager liability insurance a small part of the damage reimbursed, the former Bank Chief Rolf Breuer had done with his statements about the film entrepreneur Leo Kirch. The bank had paid in comparing more than 900 million euros to settle the years of confrontation with Kirch’s heirs. About one tenth reimbursed the insurer.
Chief Financial Officer Marcus Schenck said Wednesday to analysts, the bank assume that it could still enclose this year its four largest disputes with claimants and regulators. Among them were still originating from the time of the financial crisis actions of the US Justice Department because of mortgage securities and money laundering allegations of stock transactions with dubious customers in Russia.
Overall, had the German bank end of June EUR 5.5 billion for litigation reset, 100 million more than three months in advance. In the second quarter, most enclosed disputes were covered by provisions, said the institute. The claims of applicants for which the Bank has not completed any money, fell by 500 million to 1.7 billion euros.
“With the change even more ambitious are”
The yields were in all Group divisions decline – except for the for sale Postbank. but the traditionally strong trading business suffered even more than expected by experts. They had expected for the Global Markets division with a pre-tax profit of 265 million euros, the bank actually only reached 28 million euros. In the previous year there was still one billion euros.
| returns the business of Deutsche Bank (in billions of euros) | |||
| . 2 Quarter 2016 | changes to Q2 2015 | ||
| Global markets (capital markets) | 2.4 | – 28% | |
| Corporate & amp; Investment Banking | 1.9 | – 12% | |
| private, Wealth & amp; Commercial Clients | 1.9 | – 11% | (standing without for sale Hua Xia Bank share: -5%) |
| German Asset management | 0.7 | – 8% | |
| Postbank | 0 , 9 | 13% | Benefiting from sale of stake in Visa Europe |
the US rival had raised the bar high in the important business with fixed-income securities, foreign exchange and derivatives. Competitors such as JP Morgan and Goldman Sachs reported for the spring months growth rates in double figures. Trading in bonds, however shrank at Deutsche Bank, income fell by almost a fifth to 1.8 billion euros.
The Institute justifies this with the “implementation of the strategy”, from trade with particularly to have withdrawn risky securitization and certain mortgage securities. Despite the serious setback the German bank wants the world’s number four remain in bond trading. Cryan cautioning: “Should the current weak economic environment, we have to be more ambitious in speed and intensity of our restructuring.”
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