Deutsche Bank posts shining quarterly profit

Germany's biggest private bank, Deutsche Bank, posted on April 26 its second-best quarterly profit ever owing to strategic acquisitions and investment banking activities. Net profit in the first three months of the year climbed to 2.1 billion euros ($3.1 billion) from 1.8 billion euros in the same period of 2010, a statement said, a gain of almost 17 percent.
The latest result came within a few million euros of the bank's best ever quarterly result, in early 2007 before the global financial crisis erupted.
Deutsche Bank revenues gained an annualised 16 percent in the first quarter to 10.5 billion euros, in large part owing to recent acquisitions.
The group's core corporate and investment bank unit accounted for 6.7 billion euros of the total, and were boosted by parts of the Dutch bank ABN Amro that Deutsche Bank consolidated last year.
Another key contributor was the retail Postbank division, which reported 1.3 billion euros in revenues, and is expected "to do better than forecast this year," Deutsche Bank finance director Stefan Krause told a conference with analysts.
In addition to results from Postbank and ABN Amro units, the parent group profited from its acquisition of the private bank Sal Oppenheim and the consolidation of a 19.99 percent stake in China-based Hua Xia Bank.
"We will continue to invest in our franchise and are confident that we will deliver on our ambitious target of income before income tax of 10 billion euros from our business divisions," the statement quoted chairman Josef Ackermann as saying.
Of that sum, 3.5 billion euros had already been earned in the first quarter.
And as European banks brace for a new round of stress tests, Deutsche Bank said its core tier 1 ratio, a measure of its ability to withstand shocks, had risen to 9.6 percent from 8.7 percent at the end of 2010.
Krause said Deutsche Bank was now well funded and "did not need any more capital," though it did not rule out increases should another attractive acquisition become available.
Meanwhile, first-quarter provisions for credit losses gained 42 percent to 373 million euros, owing to the inclusion of 206 million euros from Postbank.
Without that, provisions would have declined by 37 percent to 96 million euros, "reflecting the overall favourable economic environment," technical factors, and the result of portfolio sales, the bank said.