Deutsche Bank was able to report profits and net income for Q3, pulling back from a set of ugly loss figures a year before.

Deutsche Bank, which has seen its share price battered in recent months amid speculation about its financial strength and the size of a potential fine over securities sales in the US, today reported net income of €278 million ($303.3 million) in the third quarter, versus a net loss of just over €6 billion a year before. In the nine months to 30 September, Germany's largest bank said net income was €534 million, against a loss of €4.647 billion.

Pre-tax income was €619 million in Q3, against a loss a year ago of €6.1 billion, the bank said in a statement.

Shares in Deutsche Bank were up around 2.8 per cent, at €13.7, in early trade today. A year ago, the price was trading over €27.

The loss in the prior period included a charge related to Hua Xia Bank Co. Ltd (Deutsche last year announced an expected impairment to the carrying value of this bank, in which it is has a stake), and impairments of €5.8 billion, relating to big write-downs for goodwill and intangibles amid capital requirements and other developments.

Revenues in Q3 were €7.493 billion, rising from €7.330 billion a year ago.

“The results for the quarter demonstrate well the strengths of our operating businesses and the outstanding work of our people. We continued to make good progress on restructuring the bank. However, in the past several weeks these positive developments were overshadowed by the attention around our negotiations the Residential Mortgage Backed Securities matter in the United States. This had an unsettling effect. The bank is working hard on achieving a resolution of this issue as soon  as possible," John Cryan, chief executive, said.

In a shift that will produce relief across the bank, the cost/income ratio in Q3 was 87 per cent, down from 91 per cent in the previous quarter and dramatically down from the 180 per cent ratio a year earlier.

It is speculated that Deutsche Bank could face a fine in the US of up to $14 billion for mis-selling of RMBS, although it is possible, as various reports have said, that a lower figure could be negotiated. That issue, coupled with concerns about the fragility of the eurozone, have combined to hurt Deutsche's shares. There was a flurry of concern a few weeks ago, for example, that some hedge fund clients were no longer using the Frankfurt-listed bank's services. The saga has even prompted thoughts about whether the German government would have to support the bank financially.

Revenue growth was encouraging, given the difficult market environment at times, the bank said. "Revenues in the Private, Wealth and Commercial Clients segment benefitted from the absence of a charge related to Hua Xia Bank Co. Ltd. taken in the prior year quarter and Asset Management revenues included strong positive mark-to-market movements on policyholder positions in Abbey Life."

"The revenue increase is driven primarily by 10 per cent year-over-year growth in Global Markets," it said.

Private wealth and commercial clients
Net revenues in PW&CC increased 20 per cent year-on-year to €1.74 billion in the third quarter 2016. The bank said the rise was down largely to the lack of a negative net valuation effect on Deutsche's stake in Hua Xia Bank that had been recorded a year before.

Absent certain prior-year effects, revenues in PW&CC declined by around 5 per cent year-on-year, largely reflecting the continued low interest rate environment and lower client activity, the bank said.