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

GuruFocus News
4 min read

In This Article:

  • Pre-Provision Profit: Increased by 17% year on year to EUR7 billion in the first nine months.

  • Revenue Growth: Nine-month revenues grew 3% year on year.

  • Noninterest Revenues: Up 14% year on year.

  • Cost-to-Income Ratio: Improved to 69% from 73% year on year.

  • Net Inflows: EUR27 billion in the private bank.

  • Assets Under Management: Increased by EUR67 billion year to date to EUR963 billion.

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

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

  • Common Equity Tier 1 Ratio: 13.8%, 30 basis points higher compared to the previous quarter.

  • Leverage Ratio: 4.6%, flat sequentially.

  • Liquidity Coverage Ratio: 137% daily average during the quarter.

  • Net Stable Funding Ratio: 122%, unchanged.

  • Issuance Plan: EUR16 billion year-to-date, largely completing the plan for the year.

Release Date: October 24, 2024

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

Positive Points

  • Deutsche Bank AG (NYSE:DB) reported a 17% year-on-year growth in pre-provision profit, reaching EUR7 billion in the first nine months, driven by revenue momentum and cost discipline.

  • The bank's nine-month revenues grew by 3% year on year, with 75% of revenues coming from more predictable income streams.

  • Asset management saw a significant increase, with assets under management growing by EUR67 billion year to date, supported by strong inflows into a diverse product suite.

  • The corporate bank increased deals with multinational clients by 18% compared to the previous year, showcasing strong client engagement.

  • Deutsche Bank AG (NYSE:DB) achieved a common equity Tier 1 ratio of 13.8%, 30 basis points higher than the previous quarter, indicating strong capital management.

Negative Points

  • Provision for credit losses increased to EUR494 million, with Stage 3 provisions rising to EUR482 million, mainly due to transitional Postbank integration effects.

  • The bank faced headwinds from the Postbank integration, leading to longer-than-expected impacts on internal collection and recovery processes.

  • Deutsche Bank AG (NYSE:DB) reported a higher-than-expected full-year commercial real estate provision run rate, although it has declined quarter on quarter.

  • The German economy's slow growth and recessionary trends pose challenges, with weakness in manufacturing impacting overall economic performance.

  • The bank's issuance plan for 2025 remains uncertain, with potential challenges in market conditions affecting future funding strategies.

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