London
18 °C
Manchester
15 °C
Glasgow
Dublin
Belfast
Washington
23 °C
Denver
Atlanta
Dallas
Houston Texas
New Orleans
El Paso
Phoenix
Los Angeles
17 °C
23 °C
23 °C
16 °C
30 °C
16 °C
Deutsche Bank profits boosted by legal settlements / Photo: Armando BABANI - AFP/File
Deutsche Bank profits boosted by legal settlements
Germany's biggest lender Deutsche Bank on Wednesday reported a sharp jump in third-quarter profits, boosted by the settlement of investor lawsuits related to a troubled takeover.
Net profits came in at 1.46 billion euros ($1.58 billion), up 42 percent from a year earlier. Analysts surveyed by financial data firm FactSet had forecast a figure of 1.32 billion euros.
Profits were lifted by a settlement in August with some former shareholders of Postbank, who took legal action against Deutsche Bank alleging that a takeover had shortchanged them.
This allowed Deutsche Bank to cut provisions that had been set aside for the cases.
"We made important progress in putting legacy litigation matters behind us, while also producing a record third-quarter profit in our operating business," said Deutsche Bank CEO Christian Sewing.
In the second quarter, Deutsche Bank had booked a loss of 143 million euros, dragged down by the huge provision it had to set aside related to the Postbank saga.
Following Wednesday's results, Sewing said Deutsche Bank intends to resume share buybacks.
In the July-September period, revenues rose by five percent year-on-year to 7.5 billion euros, driven by an 11 percent jump in the investment banking division, and 11 percent in asset management.
This offset falls in corporate banking and retail banking, where the positive impact of higher eurozone interest rates is fading.
The bank's shares were down almost three percent at 0830 GMT on the Frankfurt Stock Exchange.
Deutsche Bank has undergone major restructuring in recent years, seeking to rely more on retail and corporate banking after an aggressive shift in the early 2000s into investment banking drew it into multiple scandals.
The strategy has largely paid off, with the bank reaping greater profits.
Wednesday's results renewed some concerns that Deutsche Bank was again becoming too dependent on its investment banking division for profits.
But chief financial officer James von Moltke played down these worries, telling journalists: "We are comfortable with the business mix".
Signs that Italian lender UniCredit could be gearing up to launch a takeover bid for Commerzbank after building a substantial stake in its German rival has also prompted speculation Deutsche Bank could emerge as a rival suitor.
Von Moltke, however, suggested this was not on the cards: "We've been very consistent about our focus on our own strategy."
P.Gallardo--HdM
