Q2 Net Revenue At Deutsche's Wealth, Asset Arm Rises Vs Year Ago; Pre-Tax Profit Slips

Tom Burroughes

30 July 2013

Deutsche Asset & Wealth Management, part of the Frankfurt-listed banking giant Deutsche Bank, logged net revenues of €1.039 billion ($1.38 billion) in the second quarter of this year, down from €1.243 billion in the first three months of 2013 but up from €981 million in the same period a year ago.

Pre-tax income slipped to €82 million in the latest quarter from €98 million a year before and down from €222 million in the previous three months, Deutsche Bank said in a statement today.

The cost/income ratio of this segment of Germany’s biggest bank stood at 92 per cent in the second quarter, up from 81 per cent in the previous three months.

Discretionary portfolio management/fund management net revenues increased by €38 million, or 7 per cent, mainly due to a higher assets under management base, the bank said.

Net revenues from advisory/brokerage services increased by €19 million, or up by 9 per cent, driven by higher client activity levels. In credit products, revenues fell by €9 million, or 9 per cent, due to lower lending volume mainly in Asia/Pacific.

Net revenues from deposits and payment services increased by €11 million, or 20 per cent, driven by higher client activity levels, the bank said.

Group results

Across the German banking business as a whole, the bank logged net income, before tax, of €792 million, down from €967 million in same quarter of last year. Net revenues rose to €8.215 billion in Q2, up from €8.02 billion a year ago but down from €9.391 billion in the first quarter of this year.

Jürgen Fitschen and Anshu Jain, co-chief executives, said they were pleased they had reached the firm’s 2015 target of a Basel 3 Common Equity Tier 1 capital ratio of 10 per cent, a key measure of a bank’s financial strength.

“We achieved this thanks to strong operating performance and disciplined asset reduction. Furthermore, we are committed to further reducing balance sheet in a manner that enables us to meet requirements on leverage ratio, sustain our value proposition to clients and strengthen our business model without materially impacting financial performance,” they said.

Net income for Q2 was €335 million, compared to €666 million a year earlier, a drop of 50 per cent. Income tax expense in the current quarter was €457 million versus €301 million in the comparative period.