Deutsche Bank AG (DB) Q3 2024 Earnings Call Highlights: Strong Profit Growth and Strategic ...

GuruFocus News
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In This Article:

  • Revenue: EUR22.9 billion for the first nine months of 2024.

  • Adjusted Costs: EUR5 billion for the third quarter, consistent with 2024 guidance.

  • Pretax Profit: EUR2.3 billion, up over EUR500 million year on year.

  • Return on Tangible Equity (RoTE): 10.2% for the third quarter; 6% for the first nine months, excluding litigation impact 7.8%.

  • CET1 Ratio: 13.8%.

  • Pre-provision Profit: EUR7 billion for the first nine months, up 17% year on year.

  • Non-interest Revenues: Up 14% year on year.

  • Cost Income Ratio: Improved to 69% from 73% year on year, excluding litigation impacts.

  • Net Inflows (Private Bank): EUR27 billion year-to-date.

  • Branch Closures (Private Bank): Around 50 closures year-to-date.

  • Assets Under Management (Asset Management): Increased by EUR67 billion year-to-date to EUR963 billion.

  • Liquidity Coverage Ratio: 135%.

  • Net Stable Funding Ratio: 122%.

  • Group Revenues (Q3): EUR7.5 billion, up 5% year on year.

  • Non-interest Expenses (Q3): EUR4.7 billion, down 8% year on year.

  • Net Profit (Q3): EUR1.7 billion, up 39% year on year.

  • Net Interest Income (NII): EUR3.2 billion across key banking book segments.

  • Provision for Credit Losses (Q3): EUR494 million, equivalent to 41 basis points of average loans.

  • Common Equity Tier 1 (CET1) Ratio (Q3): 13.8%, up 30 basis points from the previous quarter.

  • Corporate Bank Revenues (Q3): EUR1.8 billion, flat year on year.

  • Investment Bank Revenues (Q3): Up 11% year on year.

  • Private Bank Revenues (Q3): EUR2.3 billion, flat year on year.

  • Asset Management Revenues (Q3): Increased by 11% year on year.

Release Date: October 23, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Deutsche Bank AG (NYSE:DB) achieved strong operating performance with revenues of EUR22.9 billion in the first nine months, on track to meet the EUR30 billion target for the year.

  • The bank recorded a third successive quarter of adjusted costs at EUR5 billion, aligning with 2024 guidance.

  • Reported pre-tax profit increased to EUR2.3 billion, up over EUR500 million year-on-year, supported by litigation settlements.

  • Asset management saw a significant increase in assets under management by EUR67 billion year-to-date, reaching EUR963 billion.

  • The bank's CET1 ratio of 13.8% reflects strong organic capital generation, positioning it well for planned capital distribution to shareholders, including a share buyback.

Negative Points

  • Provision for credit losses increased sequentially, with a notable impact from transitional Postbank integration effects.

  • The bank faced headwinds from larger corporate events impacting provisions, although mitigated by credit concentration hedging.

  • Non-interest expenses were slightly higher year-on-year in the Corporate Bank due to front office investments and higher internal service cost allocations.

  • The Private Bank experienced a decline in net interest income due to higher funding costs and negative episodic effects from lending books.

  • The ongoing Postbank integration has taken longer than expected, impacting collections and recovery processes.

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