Deutsche Bank reports solid results, firm outlook

Deutsche Bank, Germany’s largest bank, posted solid results yesterday despite the eurozone debt crisis and looked ahead with confidence after naming two successors to board chairman Josef Ackermann.

Deutsche Bank reported a second-quarter net profit of €1.2 billion after taking a charge of €155 million stemming from the debt crisis.

The bank’s net result marked an increase of 6.2 per cent from the figure for the same period in 2010 but it did not change its previous forecasts for the year as a whole.

“Despite increasingly difficult market conditions, our business model has proven to be robust,” chairman Josef Ackermann was quoted by a statement as saying.

“Our efforts to recalibrate and rebalance our platform are paying off nicely,” he added in reference to improved results at the private client and asset management units and the purchase of Postbank, which has Germany’s largest retail banking network.

On Monday, Deutsche Bank announced that Mr Ackermann, who is Swiss and 63, would move to the supervisory board after he steps down in May 2012 and be replaced by two men, Indian-born Anshu Jain and German Juergen Fitschen.

Mr Jain, 48, and Mr Fitschen, 62, are expected to work along operational and relational lines, with the former handling daily business and strategy and the latter spearheading contacts with German politicians and the public.

Deutsche Bank is by far the biggest German bank, with total assets of €1.85 trillion at the end of the second quarter, more than two-thirds of Germany’s forecast total output for this year of €2.59 trillion.

Mr Jain has been head of the bank’s core corporate and investment banking division from London since 2004, initially sharing that role as well, while Fitschen has been chief of the German operations.

Under Mr Jain’s direction, the CIB unit has become one of the world leaders in equities and fixed income management.

Turning back to second quarter results, Deutsche Bank’s core pre-tax income rose to €1.8 billion, a gain of 17 per cent on the year.

It took €464 million in provisions against risky loans, compared with €243 million a year earlier, with the latest amount including €182 million at Postbank.

Deutsche Bank gave its total exposure to debt in Greece, Ireland, Italy, Portugal and Spain as €3.7 billion on June 30.

European banks have agreed to participate in a second rescue plan for Greece but few have provided details on how much they are willing to stump up so far.

The group’s core Tier One ratio, a measure of its ability to withstand unexpected shocks to the financial sector, gained 1.5 percentage points to 10.2 per cent, its highest level ever, the statement said.

A breakdown of the data showed that Jain’s CIB unit contributed €4.9 billion in net revenues to the group’s total of €8.5 billion, marking annual increases of 4.25 per cent and 19 per cent, respectively.

Figures for the first half of 2011 put group net income at €3.4 billion, up from €2.9 billion in the same period a year earlier.