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Deutsche Bank (DB) Q4 Earnings Fall Y/Y, Revenues Rise
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Deutsche Bank (DB - Free Report) reported fourth-quarter 2023 profit attributable to its shareholders of €1.26 billion ($1.37 billion), down 30% year over year. The Germany-based lender reported a profit before tax of €698 million ($759.2 million), down 10% year over year.
Results were largely driven by higher net revenues. However, higher provision for credit losses and rising expenses were the offsetting factors.
Revenues & Costs Rise, Provisions Rise
The bank generated net revenues of €6.66 billion ($7.24 billion), up 5% year over year. This upside primarily resulted from higher revenues in the Corporate Bank and Investment Bank segments.
Non-interest expenses of €5.47 billion ($5.95 billion) increased 5% from the prior-year quarter. Our estimate for non-interest expenses was €5.25 billion.
Provision for credit losses was €488 million ($530.8 million), up 39% from the prior-year quarter.
Segmental Performance
Net revenues of €1.91 billion ($2.08 billion) at the Corporate Bank division increased 9% year over year. The rise was mainly driven by a favorable interest rate environment. Our estimate for the same was €1.77 billion.
Investment Bank’s net revenues totaled €1.84 billion ($2 billion), up 10% year over year. This highlights a rise FIC and Credit Trading revenues. Our estimate for the metric was €2.34 billion.
Private Bank reported net revenues of €2.4 billion ($2.6 billion), down 4% year over year. A decline in revenues in the International Private Bank majorly led to the decrease. Our estimate for the metric was €2.28 billion.
Asset Management generated net revenues of €580 million ($630.9 million), down 5% year over year. A decline in management fees, as well as other revenues, led to the fall.
Corporate & Other reported negative net revenues of €65 million ($70.7 million) compared with negative $236 million in the prior-year quarter.
Capital Position Solid
Deutsche Bank’s Common Equity Tier 1 capital ratio was 13.7% as of Dec 31, 2023, up from the year-ago quarter’s 13.4%. Risk-weighted assets were €350 billion ($380.7 billion), down 3% year over year.
The leverage ratio on a fully-loaded basis was 4.5%, down from the year-ago quarter's 4.6%.
Share Repurchase Update
Deutsche Bank received supervisory approvals for its share repurchases of up to €675 million which it aims to complete in the first half of 2024.
Our Viewpoint
Deutsche Bank’s financial performance seems encouraging. The performance of the bank improved due to the Corporate Bank and Investment Bank segments’ performances over the prior-year quarter. An increase in net revenues is expected to drive earnings growth in the near term.
Deutsche Bank Aktiengesellschaft Price, Consensus and EPS Surprise
Barclays (BCS - Free Report) is scheduled to report fourth-quarter and 2023 results on Feb 20.
Over the past seven days, the Zacks Consensus Estimate for BCS’ 2023 earnings has moved 2.8% north to $1.48 per share, indicating a decline of 2.6% from the prior-year quarter.
HSBC Holdings (HSBC - Free Report) is slated to announce fourth-quarter and 2023 results on Feb 21.
Over the past seven days, the Zacks Consensus Estimate for HSBC’s 2023 earnings has been unchanged at $6.47 per share, implying a 74.9% jump from the prior-year reported number.
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Deutsche Bank (DB) Q4 Earnings Fall Y/Y, Revenues Rise
Deutsche Bank (DB - Free Report) reported fourth-quarter 2023 profit attributable to its shareholders of €1.26 billion ($1.37 billion), down 30% year over year. The Germany-based lender reported a profit before tax of €698 million ($759.2 million), down 10% year over year.
Results were largely driven by higher net revenues. However, higher provision for credit losses and rising expenses were the offsetting factors.
Revenues & Costs Rise, Provisions Rise
The bank generated net revenues of €6.66 billion ($7.24 billion), up 5% year over year. This upside primarily resulted from higher revenues in the Corporate Bank and Investment Bank segments.
Non-interest expenses of €5.47 billion ($5.95 billion) increased 5% from the prior-year quarter. Our estimate for non-interest expenses was €5.25 billion.
Provision for credit losses was €488 million ($530.8 million), up 39% from the prior-year quarter.
Segmental Performance
Net revenues of €1.91 billion ($2.08 billion) at the Corporate Bank division increased 9% year over year. The rise was mainly driven by a favorable interest rate environment. Our estimate for the same was €1.77 billion.
Investment Bank’s net revenues totaled €1.84 billion ($2 billion), up 10% year over year. This highlights a rise FIC and Credit Trading revenues. Our estimate for the metric was €2.34 billion.
Private Bank reported net revenues of €2.4 billion ($2.6 billion), down 4% year over year. A decline in revenues in the International Private Bank majorly led to the decrease. Our estimate for the metric was €2.28 billion.
Asset Management generated net revenues of €580 million ($630.9 million), down 5% year over year. A decline in management fees, as well as other revenues, led to the fall.
Corporate & Other reported negative net revenues of €65 million ($70.7 million) compared with negative $236 million in the prior-year quarter.
Capital Position Solid
Deutsche Bank’s Common Equity Tier 1 capital ratio was 13.7% as of Dec 31, 2023, up from the year-ago quarter’s 13.4%. Risk-weighted assets were €350 billion ($380.7 billion), down 3% year over year.
The leverage ratio on a fully-loaded basis was 4.5%, down from the year-ago quarter's 4.6%.
Share Repurchase Update
Deutsche Bank received supervisory approvals for its share repurchases of up to €675 million which it aims to complete in the first half of 2024.
Our Viewpoint
Deutsche Bank’s financial performance seems encouraging. The performance of the bank improved due to the Corporate Bank and Investment Bank segments’ performances over the prior-year quarter. An increase in net revenues is expected to drive earnings growth in the near term.
Deutsche Bank Aktiengesellschaft Price, Consensus and EPS Surprise
Deutsche Bank Aktiengesellschaft price-consensus-eps-surprise-chart | Deutsche Bank Aktiengesellschaft Quote
The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Earnings Dates of Other Foreign Banks
Barclays (BCS - Free Report) is scheduled to report fourth-quarter and 2023 results on Feb 20.
Over the past seven days, the Zacks Consensus Estimate for BCS’ 2023 earnings has moved 2.8% north to $1.48 per share, indicating a decline of 2.6% from the prior-year quarter.
HSBC Holdings (HSBC - Free Report) is slated to announce fourth-quarter and 2023 results on Feb 21.
Over the past seven days, the Zacks Consensus Estimate for HSBC’s 2023 earnings has been unchanged at $6.47 per share, implying a 74.9% jump from the prior-year reported number.