FRANKFURT, July 27 (Reuters) – Deutsche Bank posted a better-than-expected second-quarter profit rise of 51% on Wednesday, buoyed by higher investment banking revenue, but the group showed signs of less optimistic about the division’s outlook for 2022 and cautioned about economic conditions.
The result, the eighth consecutive quarterly profit for the bank, comes as investors watch for signs that an economic slowdown, higher interest rates and war in Ukraine are weighing on operations and the outlook. of the banking sector.
Net profit attributable to Deutsche Bank shareholders was 1.046 billion euros, a figure to be compared with the profit of 692 million euros recorded a year earlier. Analysts for their part expected a quarterly profit of 788 million euros.
This is a crucial year for Germany’s top bank and chief executive Christian Sewing as it tries to meet targets set as part of a costly overhaul that began in 2019.
“The coming months will continue to be difficult. There is reason to believe that things will become even more difficult economically,” Christian Sewing wrote in a memo to employees.
The bank has lowered its cost target due to inflation, bank levies and other costs related to the war in Ukraine, and now expects the cost-income ratio to reach around 75. % in 2022, compared to 70% previously announced.
The bank maintained its revenue forecast for the group as a whole but downgraded its outlook for the investment bank, now expecting its revenue to be “essentially flat” this year, while that it previously forecast a “slight increase”.
Deutsche Bank – like its US rivals – suffered from a slowdown in transactions amid uncertainties related to the conflict in Ukraine.
Investment banking revenue rose 11% in the quarter, but revenue from its lending and advisory business fell 63% in the quarter.
(Report Tom Sims and Marta Orosz, French version Diana Mandiá, edited by Kate Entringer)