Deutsche Bank's profit streak ends with big lawsuit provision
1.3 bln euro provision behind first loss in four years
Q2 loss of 143 mln euros narrower than analysts had expected
No plans for second share buyback this year -CFO
Updates with context and details
By Tom Sims and Matthias Inverardi
FRANKFURT, July 24 (Reuters) -Deutsche Bank DBKGn.DE posted its first loss in four years in the second quarter after setting aside 1.3 billion euros ($1.41 billion) as a provision for a protracted investor lawsuit over its Postbank acquisition.
The loss at Germany's largest lender broke a profit streak after 15 consecutive quarters in the black, in a setback for the bank's turnaround under CEO Christian Sewing.
The bank's net loss attributable to shareholders was 143 million euros in the quarter. That compares with a profit of 763 million euros a year earlier, and was better than analyst expectations for a loss of around 280 million euros.
The bank also increased its forecast for provisions for credit losses for the full year, and its finance chief told Bloomberg TV the bank would not conduct a second share buyback this year.
Deutsche executives nevertheless strove to explain the quarter was an aberration and that it was on track to meet its targets.
The loss was "solely due to the legal provision", Sewing wrote in a memo to employees.
He said "our operating strength is evident" and that the bank would meet its targets.
The bank's quarterly earnings are part of a flurry of reports from Europe's biggest banks, as investors eye whether gains from higher interest rates have run out of steam and if political ructions in France, Britain and the U.S. are weighing on sentiment.
The legal issue at Deutsche centres around the no-frills Postbank, with its millions of clients and roots in the country's postal system, which Deutsche began acquiring during the 2008 global financial crisis.
With the purchase, Deutsche was seeking to broaden its reach in Germany with a steady income stream after years of rapid international expansion.
Instead, Postbank has evolved into a source of consumer complaints, regulatory scrutiny, labour strife and the long-running and costly lawsuits.
The suits, which claim Deutsche underpaid for the Postbank purchase, have been bouncing around courts for years.
Deutsche said in April that it still strongly disputed the claims but that it had decided to post a provision for the cases of 1.3 billion euros. It was a surprise move that took investors off guard and resulted in a 9% drop in shares.
The results come as Deutsche navigates a weak economy in its home market, which the nation's central bank this week warned was growing more slowly than it had expected and that hopes of an imminent industrial rebound had been dampened.
Regulators, meanwhile, have warned 2024 will be less rosy for German bank profits as a property crisis weighs and loans go bad.
The bank is also trying to cut costs to meet its 2025 targets, which most analysts believe will be hard to reach.
Deutsche's biggest breadwinner in the second quarter was its sprawling investment bank, which has operations spanning from Sydney to New York. Revenues rose 10% from a year earlier, in line with expectations, though it was behind a 12% rise reported by France's BNP Paribas on Wednesday and jumps of more than 30% at some big U.S. competitors.
In contrast with the investment bank, revenues at Deutsche's retail and corporate banking divisions fell.
As part of a 2019 revamp, Deutsche had tried to rebalance the lender so that the volatile investment bank - once its problem child - carried less weight. But it is forecast to remain the largest division in the coming years.
Within the investment bank, origination and advisory was a pillar of strength in the quarter, with revenue rising 88%, compared with expectations of a 66% increase and outpacing gains at big U.S. competitors.
Revenue for fixed-income and currency trading, one of the bank's largest businesses, dropped 3%, slightly worse than expectations for a nearly 2% decline. They were up 5% for U.S. banks, according to Jefferies.
($1 = 0.9222 euros)
Deutsche Bank posts loss https://reut.rs/4bTTh2F
Reporting by Tom Sims and Matthias Inverardi; Editing by Miranda Murray and Jamie Freed
免責聲明: XM Group提供線上交易平台的登入和執行服務，允許個人查看和/或使用網站所提供的內容，但不進行任何更改或擴展其服務和訪問權限，並受以下條款與條例約束：（i）條款與條例；（ii）風險提示；（iii）完全免責聲明。網站內部所提供的所有資訊，僅限於一般資訊用途。請注意，我們所有的線上交易平台內容並不構成，也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。
所有缐上交易平台所發佈的資料，僅適用於教育/資訊類用途，不包含也不應被視爲適用於金融、投資稅或交易相關諮詢和建議，或是交易價格紀錄，或是任何金融商品或非應邀途徑的金融相關優惠的交易邀約或邀請。
本網站的所有XM和第三方所提供的内容，包括意見、新聞、研究、分析、價格其他資訊和第三方網站鏈接，皆爲‘按原狀’，並作爲一般市場評論所提供，而非投資建議。請理解和接受，所有被歸類為投資研究範圍的相關内容，並非爲了促進投資研究獨立性，而根據法律要求所編寫，而是被視爲符合營銷傳播相關法律與法規所編寫的内容。請確保您已詳讀並完全理解我們的非獨立投資研究提示和風險提示資訊，相關詳情請點擊 這裡查看。
