Curb your enthusiasm

25 July 2018 By Christopher Thompson Follow @CGAThompson

The German bank is targeting a 4 percent return target for 2019. To achieve it, the German lender requires revenue to hold steady while cutting costs to 22 billion euros. Given ongoing declines in the investment bank, even that modest goal looks ambitious.

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Deutsche Bank on July 25 reported second-quarter net income of 401 million euros, down 14 percent year-on-year. Net revenue for the quarter was flat year-on-year at 6.59 billion euros.

Revenue in Deutsche Bank’s corporate and investment bank, its biggest division, declined by 1 percent year-on-year to 3.57 billion euros.

Group pre-tax profit was 711 million euros, down 13 percent year-on-year. The bank made a return on tangible equity of 2.7 percent, compared with 3.2 percent over the same period during the previous year.

In April CEO Christian Sewing described shareholder returns as “not acceptable” and pledged to cut back businesses in the United States and Asia to better focus on European clients. The lender’s common equity Tier 1 capital ratio rose to 13.7 percent, from 13.4 percent three months earlier.

The bank aims to achieve a 4 percent return on tangible equity by 2019.

Deutsche Bank shares were down 1.5 percent at 10.3 euros as of 0730 GMT on July 25.

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