Cost cuts, lower legal expenses boost Deutsche Bank profit
FRANKFURT, Germany (AP) — Deutsche Bank saw net income for the third quarter more than double as the bank cut costs and worked past fines and settlements stemming from past misconduct.
Net income rose to 649 million euros ($766 million) from 278 million euros a year ago, the bank said Thursday.
Earnings have improved despite a 10 percent decline in revenues to 6.8 billion euros. The bank saw less income because of low interest rates, which squeezes lending margins, and as calmer financial markets led clients to trade less. The previous year’s quarter saw more market fluctuations in the wake of Britain’s referendum vote to leave the European Union.
The bank said it shed 4,000 employees and saw lower severance and restructuring costs. The bank has been carrying out a difficult restructuring to adapt to tougher regulatory requirements and cope with the low interest rate environment.
Legal expenses fell to 140 million euros from 501 million euros. Chief Financial Officer James von Moltke said that the bank had resolved 13 of 20 outstanding financial risks, but that settlement amounts were hard to predict and could rise in months ahead. The bank has paid out billions for regulatory and legal violations including a $7.2 billion settlement with U.S. authorities over sales of mortgage-based bonds.
The bank also said it would merge its Deutsche Bank and Deutsche Postbank retail operations into a single unit by the second quarter of 2018. The combination would have 20 million customers and bring annual savings of 900 million euros from 2022.