Profits at Deutsche Bank’s investment bank almost halved in the fourth quarter

Deutsche Bank’s pre-tax profit from its investment banking business nearly halved at the end of last year as the division was hit by falling operating revenues, rising costs and provisions for debt. bad is higher

The lender on Thursday said the investment bank, which generates nearly two-fifths of the group’s full-year revenue, generated pre-tax profits of 319 million euros in the fourth quarter, down from 599 million euros a year. previous year. Analysts had expected a profit of 407 million euros from this unit.

Between October and December, revenue from fixed income and currency trading was 14% lower than a year ago as the pandemic-induced trading fever in capital markets eased. At the same time, the department’s payroll costs increased by 30%, pushing the total cost by more than a quarter. Provisions for loan losses doubled.

Overall, the bank’s full-year 2021 profit quadrupled to €2.5 billion and hit its highest level since 2011. Return on equity rose to 3.4% and below target. the bank’s 2022 spending is at least 8%.

Deutsche on Wednesday said it would continue to pay a 400 million euro dividend this year. It will also buy back €300 million of shares, representing just over 1% of the market capitalization. Chief Executive Officer Christian Sewing suspended the dividend in 2019 when he announced a radical restructuring plan that will cost the bank nearly 9 billion euros in restructuring costs by 2022.

“We are delighted to resume the distribution of capital to shareholders as we promised in the summer of 2019,” Sewing said in a statement, adding that the share buyback and share i.e. the first steps in fulfilling his promise to return 5 billion euros to investors.

Deutsche’s tier one core equity ratio, a key indicator of balance sheet strength, fell 0.4 percentage points to 13.2% of risk-weighted assets at the end of the year. five.

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