(Updated with CFO commentary, details, stock price)
by Tom Sims and Frank Siebelt
FRANKFURT, April 27 (Reuters) – Deutsche Bank on Wednesday reported first-quarter profit up 17%, beating expectations, on higher revenue at its investment bank.
However, the title fell 5% at the start of the session on the Frankfurt Stock Exchange after the group warned of the consequences that the conflict in Ukraine could have on its profits.
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.
Net profit, group share, in the first quarter was 1.06 billion euros, exceeding analysts’ expectations of around 950 million euros.
It was Deutsche Bank’s seventh straight quarter of profit and its highest quarterly revenue since 2014.
The bank, however, announced that provisions for credit losses are expected to increase “significantly” this year due to the war and slowing growth.
Chief Financial Officer James von Moltke told reporters that the race for talent could also put pressure on costs.
Investors wonder whether the bank will achieve its main target – an 8% return on tangible equity – this year, but Deutsche Bank said it is well positioned to meet that target.
The group has lost more than 9 billion euros over the past decade, and it remains under the close watch of regulators, being one of the most important banks in the world for the financial system. (Report Tom Sims and Frank Siebelt, with the contribution of Alexander Kloss; French version Kate Entringer, edited by Jean-Michel Bélot)