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Deutsche Bank’s shares fall after poor third quarter

By Ashley Norris
October 30, 2019, 12:19 PM GMT
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    Troubled German bank dogged by disappointing bond trading performance and restructuring costs

    Deutsche Bank, Germany’s largest lender, has posted an €832m (£718m, $926m) loss for the third quarter. Its poor performance was largely due to a drop in revenue from its bond trading division, as well as significant costs incurred on company restructuring.

    Deutsche’s bond trading division suffered an especially disappointing quarter with a 13pc drop in revenue. This compares with a 10pc rise in the same period for US banks, according to Goldman Sachs.

    The loss was compounded by restructuring costs. The bank, which has struggled since the global financial crisis of 2008 and the subsequent euro debt crisis, is cutting a large percentage of its trading desks, losing 18,000 jobs which will cost €7.4bn.

    This is the second consecutive quarterly loss for the bank and compares with a €3.15bn loss in the second quarter and a €229m euro net profit a year ago.

    The news impacted on the bank’s share price, which opened 3% lower than the previous day (October 29th). The share price is currently (October 30th AM GMT) not far off its lowest level in at least 20 years.

    Nevertheless, Deutsche Bank’s Chief Executive Officer, Christian Sewing, penned a positive message to staff highlighting how the bank’s four core divisions posted a pre-tax profit. “These quarterly results are just an interim assessment, but they are encouraging,” he wrote.

    James von Moltke, Chief Financial Officer at Deutsche Bank, assured investors that the bank’s performance was not a surprise. He told CNBC, “our results in the quarter are entirely in line with our plans. We are executing, I think, well against the strategic changes we announced in the summer,”

    The bank has undergone a difficult decade with increased competition, a reduced market share in both commercial and investment banking, management changes, continual restructuring and having to pay billion-dollar fines.

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