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Deutsche Financial institution leads to the 2nd quarter of 2021

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Christian Sewing, the new CEO of Deutsche Bank, speaks at the Annual General Meeting of Deutsche Bank on May 24, 2018 in Frankfurt. Shareholders, frustrated by Deutsche Bank’s poor performance for many years, demand Achleitner’s resignation.

Thomas Lohnes | Getty Images

LONDON – Deutsche Bank posted a big hit for the second quarter on Wednesday despite a decline in sales in its major investment banking arm.

The lender reported net income of 692 million euros ($ 818 million) for the second quarter of this year, while analysts had forecast net income of 328 million euros for the quarter, according to Refinitiv.

Despite the unexpectedly high profit, Deutsche Bank posted an 11% year-over-year net income decline in investment banking. This unit had made a decisive contribution to the profitability of the ailing bank in the first quarter of the year. According to recent reports, Deutsche Bank has lost some market share in this area in recent months.

However, in a conversation with CNBC on Wednesday, James von Moltke, the bank’s chief financial officer, downplayed these reports.

“There are bond markets where some of the market share that was concentrated in the largest banks last year has become less concentrated this quarter. So we don’t see this as idiosyncratic for Deutsche Bank, ”he said, adding that in key markets such as fixed income, the German lender was gaining market share.

Further highlights of the quarter:

  • At 6.2 billion euros, total sales were slightly below the previous year’s figure.
  • The total expenditure reached almost 5 billion euros, around 7% less than in the previous year.
  • The number of employees was 83,797 after 86,824 in the previous year.

In addition, the German lender shows loan loss provisions of EUR 75 million for this quarter. The stock is up about 18% since the start of the year.

“Despite the normalization of the markets that we all expected, we have seen strong sales growth in all of our core businesses,” von Moltke told CNBC’s Annette Weisbach.

“Activity was relatively subdued in early July,” he added, citing the “continued normalization” of markets in terms of volatility in 2020 as the main reason for the slow pace of activity.

However, he said the German bank was “optimistic” about its performance this year and next.

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