Deutsche Bank on Thursday beat its fourth-quarter profit expectations by reporting net income of 1.3 billion euros ($1.4 billion) and announcing another 1.6 billion euros in shareholder returns for 2024.
Quarterly net profit marked a decline of almost 30% compared to the same quarter last year, but was well above the 785.61 million euros expected by analysts. This is followed by a net profit of 1.031 billion euros for the previous quarter and 1.8 billion euros for the same period last year.
The German lender also announced plans to increase share buybacks and dividends by 50%, returning a total of 1.6 billion euros to shareholders.
Deutsche Bank says it is planning a further share buyback worth 675 million euros, which it wants to complete in the first half of the year. This follows buybacks of €450 million in 2023. In addition, it plans to propose a dividend of €900 million for 2023 to shareholders at its annual general meeting in May.
For the full year, the bank reported net profit attributable to shareholders of 4.2 billion euros, exceeding analysts’ expectations of 3.685 billion euros.
“The pre-tax profit is at a record high of 5.7 billion. “We have grown compared to last year, despite some items that caused excitement this year, but what is really exciting is the momentum we are seeing in the business,” Deutsche Bank Chief Financial Officer James von Moltke said on Thursday told CNBC.
“We had 10% year-over-year growth in the fourth quarter in our investment bank, and admittedly in a year where the very strong performances of 2021 and ’22 were still down, so down 9% for the full year, but we We are seeing momentum in lending advice, particularly now at the start of 24, and very strong, in my opinion consistent, performance in our FIC [fixed income and currencies] Franchise.”
As part of a €2.5 billion operational efficiency program, Deutsche Bank expects to cut 3,500 jobs, mostly in “non-customer-facing areas”.
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Deutsche Bank shares in the last 12 months
By the end of 2023, the realized or expected savings through completed measures as part of the efficiency program rose to 1.3 billion euros, the bank estimated. The aim of the program is to reduce the quarterly run rate of adjusted costs to 5 billion euros, with total costs expected to fall to around 20 billion by 2025.
In a statement on Thursday, Sewing said the bank’s performance in 2023 “underscores the strength of our global house banking strategy as we help our customers navigate an uncertain environment.”
“We achieved our highest pre-tax profit in 16 years, delivered growth well above target and maintained our focus on cost discipline while investing in key areas,” Sewing said.
“Our strong capital generation allows us to accelerate distributions to shareholders. This gives us strong confidence that we will achieve our 2025 targets.”
Deutsche Bank has become the subject of merger speculation in recent months amid concerns about the bank’s profitability and reports that the German government is considering selling some of its corporate holdings, including its 15 percent stake in Commerzbank.
However, CEO Christian Sewing told CNBC at the World Economic Forum in Davos, Switzerland, that takeovers are not a “priority” for Germany’s largest bank.
This is breaking news, check back later for more.
Correction: This article has been updated to reflect that Deutsche Bank’s results were released on Thursday.
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2024-02-01 06:58:34
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