Tags: Deutsche | bank | Bucks | Weak | Investment | Banking | Trend

Deutsche Bucks Weak Investment Banking Trend

Wednesday, 27 October 2010 09:38 AM EDT

Deutsche Bank AG is optimistic for its business for the rest of this year after posting resilient profit from investment banking in the third quarter, bucking a weaker trend set by some rivals.

The rebound in sales and trading of debt products since late September had left the bank "very positive" about the fourth quarter, Chief Financial Officer Stefan Krause said on Wednesday, adding the uncertain nature of markets left Deutsche Bank unable to give a definitive outlook.

Krause added that the bank plans to return to historic levels of dividend payments as soon as possible, once it has implemented the new Basel III bank capital rules.

"If you were to ask what an acceptable payout ratio is, I would reconfirm the 30 to 40 percent (ratio of net income), which is something that Deutsche Bank has done in the past," Krause said.

Germany's flagship lender on Wednesday posted an 11 percent gain in pretax profit at its corporate and investment bank, in contrast to Credit Suisse, UBS and Morgan Stanley which have reported weakness in investment banking.

"It's a good result when compared to competitors," Merck Finck analyst Konrad Becker said, referring to higher investment banking earnings.

Deutsche Bank shares were up 2.2 percent at 42.08 euros at 0938 GMT, outperforming a 0.6 percent higher STOXX 600 European bank index

Deutsche Bank had an overall pretax loss of 1 billion euros ($1.40 billion) in the quarter, in line with forecasts, weighed down by an expected 2.3 billion euro ($3.2 billion) charge related to its acquisition of Deutsche Postbank.

Although Deutsche Bank had warned in September that it would post a quarterly loss due to weaker sales and trading activity in July and August, it said on Wednesday there had been a strong rebound in late September.

Revenue in corporate banking and securities — the cash cow of Deutsche Bank's investment bank — eased to 4.2 billion euros in the third quarter from 4.4 billion in the year-earlier period.

It still accounted for the lion's share of the group's overall revenue of 5.0 billion euros. Without the charge related to Postbank, Deutsche Bank's revenue was 7.3 billion euros.

Deutsche Bank stuck to a cautious outlook for 2011, when it aims to reach 10 billion euros group pretax profit.

© 2024 Thomson/Reuters. All rights reserved.


FinanceNews
Deutsche Bank AG is optimistic for its business for the rest of this year after posting resilient profit from investment banking in the third quarter, bucking a weaker trend set by some rivals. The rebound in sales and trading of debt products since late September had left...
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2010-38-27
Wednesday, 27 October 2010 09:38 AM
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