Deutsche Bank offices in the City of London on July 2, 2024, in London, U.K.
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Germany’s largest lender Deutsche Bank on Thursday reported weaker-than-expected profit that fell sharply in the last three months of 2024, as legal provisions weighed on the bottom line.
Net profit attributable to shareholders hit 106 million euros ($110.4 million) in the fourth quarter, compared with the 282.39 million euros forecast in an LSEG poll of analysts. The result marked a significant fall from the 1.461 billion euros achieved in the third quarter.
Revenue reached 7.224 million euros in the fourth quarter, versus an LSEG analyst poll of 7.125 billion euros — but was eroded by litigation costs over the period to the tune of 594 million euros.
“We are not happy with one-off expenses or surprises and most of these things have really been … issues arising from the past, sometimes the distant past, the PostBank takeover litigation matter in 2024 is a good example. Which, on a net basis, represents about 900 million of costs in ’24,” Deutsche Bank CFO James von Moltke told CNBC’s Annette Weisbach in a Thursday interview.
“So in a sense, the only good news thing you can say about it: it’s behind us. And importantly, therefore, the risk profile of the company is dramatically changed.”
The bank said it now targets a cost-income ratio of below 65% this year, compared with an initial goal of below 62.5%. Despite the drop in quarterly profit, Deutsche Bank also launched a 750 million-euro share buyback.
Other fourth-quarter highlights included:
- Profit before tax of 583 million euros, down 17% year-on-year;
- Provision for credit losses of 420 million euros, down 14% year-on-year;
- CET 1 capital ratio, a measure of bank solvency, was 13.8%, unchanged from the third quarter.
This breaking news story is being updated.