Deutsche Bank Q2 2019 results are predictably dire with a net loss of €3.1bn after strategic transformation charges of €3.4bn.
Moreover, on an underlying basis Deutsche posts second quarter net income of €231m down 42% from the year ago quarter.
Specifically, results at Deutsche Bank’s investment banking unit are grim with a pre-tax loss of €907m for the second quarter.
Dealing firstly with the Deutsche Bank Q2 2019 positives, the highlights are brief.
The bank reports modest loan growth of €14bn and net asset inflows of €20bn. In addition, assets under management are up by €88bn.
Deutsche Bank Q2 2019 non-interest expenses are down by 3% with adjusted costs down by 4%.
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Moreover, the capital position remains robust with a common equity tier 1 ratio of 13.4%. But that is also down, by 30 basis points from the prior quarter.
Deutsche Bank Q2 2019 less positive metrics
The bank continues to miss its own targets. For example, Deutsche requires to grow revenue at 2% to make targets but instead revenue is down 6% to €6.2bn.
The investment banking unit was forecast to post dismal earnings but the actual results are worst than expected. Revenues in the Corporate & Investment unit are down 18% y-o-y to €2.9bn. Furthermore, revenues at the Private & Commercial unit (P&CB) are down 2% y-o-y to €2.5bn.
The bank’s domestic P&CB unit does at least manage to post a modest rise in revenue, up 2% y-o-y.
On the other hand, international P&CB unit revenue is down by 3% y-o-y.
Wealth Management also takes a hit with revenues of €429m down 9% year-on-year.
Christian Sewing, CEO says: “We have already taken significant steps to implement our strategy to transform Deutsche Bank. These are reflected in our results. A substantial part of our restructuring costs is already digested in the second quarter.
“Excluding transformation charges the bank would be profitable and in our more stable businesses revenues were flat or growing. This, combined with our solid capital and liquidity position, gives us a firm foundation for growth.”
Deutsche Bank’s share price is down by 3% for the year to date giving a market cap of €14.3bn. The Deutsche Bank market cap in 2007, just prior to the financial crisis, peaked at more than €61bn.