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Deutsche Bank's Q3 Earnings Rise Y/Y, Stock Slips on Provision Hike
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Deutsche Bank (DB - Free Report) reported third-quarter 2024 earnings attributable to its shareholders of €1.5 billion ($1.6 billion), up 41.7% year over year.
Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.
The Germany-based lender reported a profit before tax of €2.3 billion ($2.4 billion), up 31.2% year over year. Third-quarter profit growth was driven by approximately €440 million ($474.4 million) partial release of Postbank-related litigation provisions.
Excluding Postbank-related litigation release, profit before tax of €1.8 billion ($1.9 billion) increased 6% year over year.
Results were positively impacted by solid growth in Investment Bank revenues and the partial release of Postbank-related litigation provisions. However, DB has increased its provision of credit loss forecast for 2024. This led investors to turn bearish on the stock, resulting in a fall of 1.4%.
Deutsche Bank’s Revenues & Expenses
The bank generated net revenues of €7.5 billion ($8.1 billion), up 5% year over year. This upside was primarily driven by strong growth in commissions and fee income, and broadly stable net interest income.
Non-interest expenses of €4.7 billion ($5.1 billion) declined 8% from the prior-year quarter.
Provision for credit losses was €494 million ($474.9 million), significantly up from €245 million ($264.1 million) in the prior-year quarter.
DB’s Segmental Performance
Corporate Bank: Net revenues for the segment were €1.8 billion ($1.9 billion), down 3% year over year. The results were hurt by lower net interest income, a decline in loan net interest income, and a decrease in Corporate Treasury Services and Business Banking revenues.
Investment Bank: This segment’s net revenues totaled €2.5 billion ($2.7 billion), up 11% year over year. The upside was primarily driven by growth across Fixed Income and Currencies, and Origination & Advisory.
Private Bank: Net revenues of €2.3 billion ($2.5 billion) were essentially flat year over year. This reflects an increase in Wealth Management & Private Banking revenues, and lower revenues in Personal Banking.
Asset Management: Net revenues of €660 million ($711.5 million) rose 11% year over year. An increase in management fees led to the rise.
Corporate & Other: The segment reported net revenues of €157 million ($169.2 million), up from €35 million ($37.7 million) a year ago.
Deutsche Bank’s Capital Position
DB’s Common Equity Tier 1 capital ratio was 13.8% as of Sept. 30, 2024, down from the year-ago quarter’s 13.9%.
The leverage ratio on a fully loaded basis was 4.6%, down from the year-ago quarter's 4.7%.
DB’s 2024 Outlook
Deutsche Bank’s revenue trajectory is on track to meet the €30 billion ($32.3 billion) target for 2024, supported by momentum in all businesses.
Provision for credit losses is projected to be €1.8 billion ($1.9 billion), up from the €1.5 billion ($1.6 billion) reported in 2023.
Our Viewpoint on Deutsche Bank
DB’s revenues improved from the prior-year quarter, driven by strong growth in Asset Management and Investment Bank segments. The bank’s rise in commissions and fee income is another positive. A decline in reserves for Postbank lawsuits is likely to support financials in the upcoming period. However, a rise in provision for credit losses is concerning.
Deutsche Bank Aktiengesellschaft Price, Consensus and EPS Surprise
Macro Bank (BMA - Free Report) is scheduled to release third-quarter 2024 results on Nov. 27.
The Zacks Consensus Estimate for BMA’s quarterly earnings has been unchanged at $2.64 per share over the past 7 days. The estimate indicates a significant surge from the prior-year quarter’s reported earnings of 33 cents.
UBS Group AG (UBS - Free Report) is expected to report third-quarter 2024 results on Oct. 30.
Over the past seven days, the Zacks Consensus Estimate for UBS’ quarterly earnings has been unchanged at 35 cents per share, whereas it incurred a loss of 24 cents a year ago.
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Deutsche Bank's Q3 Earnings Rise Y/Y, Stock Slips on Provision Hike
Deutsche Bank (DB - Free Report) reported third-quarter 2024 earnings attributable to its shareholders of €1.5 billion ($1.6 billion), up 41.7% year over year.
Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.
The Germany-based lender reported a profit before tax of €2.3 billion ($2.4 billion), up 31.2% year over year. Third-quarter profit growth was driven by approximately €440 million ($474.4 million) partial release of Postbank-related litigation provisions.
Excluding Postbank-related litigation release, profit before tax of €1.8 billion ($1.9 billion) increased 6% year over year.
Results were positively impacted by solid growth in Investment Bank revenues and the partial release of Postbank-related litigation provisions. However, DB has increased its provision of credit loss forecast for 2024. This led investors to turn bearish on the stock, resulting in a fall of 1.4%.
Deutsche Bank’s Revenues & Expenses
The bank generated net revenues of €7.5 billion ($8.1 billion), up 5% year over year. This upside was primarily driven by strong growth in commissions and fee income, and broadly stable net interest income.
Non-interest expenses of €4.7 billion ($5.1 billion) declined 8% from the prior-year quarter.
Provision for credit losses was €494 million ($474.9 million), significantly up from €245 million ($264.1 million) in the prior-year quarter.
DB’s Segmental Performance
Corporate Bank: Net revenues for the segment were €1.8 billion ($1.9 billion), down 3% year over year. The results were hurt by lower net interest income, a decline in loan net interest income, and a decrease in Corporate Treasury Services and Business Banking revenues.
Investment Bank: This segment’s net revenues totaled €2.5 billion ($2.7 billion), up 11% year over year. The upside was primarily driven by growth across Fixed Income and Currencies, and Origination & Advisory.
Private Bank: Net revenues of €2.3 billion ($2.5 billion) were essentially flat year over year. This reflects an increase in Wealth Management & Private Banking revenues, and lower revenues in Personal Banking.
Asset Management: Net revenues of €660 million ($711.5 million) rose 11% year over year. An increase in management fees led to the rise.
Corporate & Other: The segment reported net revenues of €157 million ($169.2 million), up from €35 million ($37.7 million) a year ago.
Deutsche Bank’s Capital Position
DB’s Common Equity Tier 1 capital ratio was 13.8% as of Sept. 30, 2024, down from the year-ago quarter’s 13.9%.
The leverage ratio on a fully loaded basis was 4.6%, down from the year-ago quarter's 4.7%.
DB’s 2024 Outlook
Deutsche Bank’s revenue trajectory is on track to meet the €30 billion ($32.3 billion) target for 2024, supported by momentum in all businesses.
Provision for credit losses is projected to be €1.8 billion ($1.9 billion), up from the €1.5 billion ($1.6 billion) reported in 2023.
Our Viewpoint on Deutsche Bank
DB’s revenues improved from the prior-year quarter, driven by strong growth in Asset Management and Investment Bank segments. The bank’s rise in commissions and fee income is another positive. A decline in reserves for Postbank lawsuits is likely to support financials in the upcoming period. However, a rise in provision for credit losses is concerning.
Deutsche Bank Aktiengesellschaft Price, Consensus and EPS Surprise
Deutsche Bank Aktiengesellschaft price-consensus-eps-surprise-chart | Deutsche Bank Aktiengesellschaft Quote
The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Earnings Release Dates of Other Foreign Banks
Macro Bank (BMA - Free Report) is scheduled to release third-quarter 2024 results on Nov. 27.
The Zacks Consensus Estimate for BMA’s quarterly earnings has been unchanged at $2.64 per share over the past 7 days. The estimate indicates a significant surge from the prior-year quarter’s reported earnings of 33 cents.
UBS Group AG (UBS - Free Report) is expected to report third-quarter 2024 results on Oct. 30.
Over the past seven days, the Zacks Consensus Estimate for UBS’ quarterly earnings has been unchanged at 35 cents per share, whereas it incurred a loss of 24 cents a year ago.