FRANKFURT: Deutsche Bank posted a better-than-expected 51% rise in second-quarter profit on Wednesday as investment banking revenues rose, though the lender was less optimistic about the division’s prospects for the full year and warned about the economic outlook.

The results come amid a week of earnings reports by major lenders across Europe, where investors are watching for signs that a weaker economy, higher interest rates and the war in Ukraine are weighing on their operations and outlooks.

Germany’s banks are at the centre of a geopolitical storm because the country is particularly dependent on Russian energy and its economy will be hit hard by any supply shortages.

Net profit attributable to shareholders was 1.046 billion euros ($1.06 billion).

That compares with profit of 692 million euros a year earlier, and it is better than analyst expectations for profit of around 788 million euros. It was the eighth consecutive quarter of profit, a notable streak after years of losses.

Deutsche Bank’s investment banking coverage chief to depart

This year is crucial for Germany’s largest lender and Chief Executive Christian Sewing as he tries to deliver on targets he set out in a costly overhaul of the bank embarked upon in 2019.

Sewing wrote to staff that they should be proud of the results but in the memo sounded bleak about the near-term economic outlook.

“The months ahead will continue to be challenging. There is reason to believe that things will become even more difficult economically,” he wrote.

The bank revised down its revenue guidance for the investment bank, now expecting revenues to be “essentially flat” this year, compared with previous expectations for “slightly higher”.

Investment banking revenues were up 11% in the quarter, and revenues at the corporate bank rose 26%, helped by rising interest rates.