D.he Deutsche Bank surprises with surprisingly good figures in the third quarter. With a pre-tax profit of 482 million euros, the largest German bank clearly exceeded the expectations of the analysts, who had expected a pre-tax profit of 178 million euros. Now that the bank has earned 846 million euros in the first nine months of the year, the chances of its first annual profit in six years are good. And that despite Corona. Or maybe because of Corona?
The bank owes the good quarterly profit and the pleasing figures in the first half of the year to the booming business on the bond market. Corona-weakened companies urgently need liquidity. And many get them on the capital market by issuing bonds.
This is a special boom for all banks that are strong in this segment. Deutsche Bank was able to increase its income from trading in fixed-income securities and currencies by a whopping 47 percent. A good every third euro that the bank collects currently comes from this sector.
The stock exchange looks to the future
The market fluctuations caused by the coronavirus caused a healthy influx in asset management as well, namely in the fund subsidiary DWS. At the same time, the bank benefited from the fact that the corona crisis lost some of its fright for companies, at least in the period from July to September. During this time, she was able to significantly reduce her provision for credit risks.
In the stock markets, of course, the future counts more than the past. The bank’s share price fell by up to 4 percent in early trading – albeit in an overall very weak market. The concern of a new lockdown in Germany and other important markets for the bank is obviously greater than the good business so far this year. It is already becoming apparent that the corona pandemic will have another powerful impact after a comparatively calm summer in the autumn and winter months – with potentially devastating consequences for the global economy.
Dreary development in important areas
How long Deutsche Bank will be sustained by the boom in the bond markets, no one at the bank can say either. CEO Christian Sewing had already spoken of normalization in the second half of the year, but this has apparently not yet occurred. In the other business areas of the bank, things look much dreary.
The private customer business was only able to report stable earnings. In business with companies, income even fell by 5 percent. Above all, the transaction bank, which is often referred to as the backbone, which handles transfers from major customers all over the world, does less business in times of ailing trade.
It is true that Sewing has made surprisingly quick progress with converting the bank to more solidity. But now, of all times, he has to prove that solid profits can be achieved with the new structure at a time when there is more uncertainty than it has been for a long time.