Deutsche Bank on Thursday beat fourth-quarter profit expectations, reporting a net profit of 1.3 billion euros ($1.4 billion) and announcing an additional 1.6 billion euros in shareholder returns in 2024.
Net profit for the quarter was down nearly 30% year-on-year, but significantly exceeded analysts’ expectations of 785.61 million euros. This follows a net profit of 1.031 billion euros in the previous quarter and a net profit of 1.8 billion euros in the same period last year.
The German lender also announced plans to increase share buybacks and dividends by 50%, returning a total of 1.6 billion euros to shareholders.
Deutsche said it plans an additional 675 million euros in share buybacks, which it aims to complete in the first half of this year. This follows his €450 million share buyback in 2023. Also, at the annual general meeting in May he will recommend 900 million euros as a shareholder dividend for 2023.
For the full year, the company reported net profit attributable to shareholders of 4.2 billion euros, exceeding analysts’ expectations of 3.685 billion euros.
“Pre-tax profit is at a record level at $5.7 billion, which grew year over year even though some items caused noise this year,” said James Fong, Deutsche Bank’s chief financial officer. But what’s really exciting is the momentum we’re seeing in the business.” Moltke told CNBC on Thursday.
“Our investment bank’s fourth quarter growth was 10% year-over-year, which was certainly a year that was still building on a very strong performance in 2021 and 2022, so we were down 9% for the full year. , we’re seeing momentum in composition advisory, especially going into 2024, and we’re seeing very strong and consistent performance in FIC. [fixed income and currencies] franchise. ”
Deutsche Bank said it expects to cut 3,500 jobs, mainly in “non-customer-facing areas” as part of a 2.5 billion euro operational efficiency program.
Deutsche Bank stocks over the past 12 months
According to the bank’s estimates, at the end of 2023, the savings realized or expected from the completed measures under the efficiency program had increased to €1.3 billion. The goal of the program is to reduce the quarterly rate of adjusted costs to 5 billion euros and bring total costs down to around 20 billion euros in 2025.
Mr Sewing said in a statement on Thursday that the bank’s 2023 performance “underlines the strength of our global housebank strategy to help customers navigate an uncertain environment.”
“We achieved our best pre-tax profit in 16 years, achieved growth well above our targets and maintained our focus on cost discipline while investing in key areas,” Mr Sewing said.
“Our strong capital generation allows us to accelerate distributions to shareholders, which gives us strong confidence that we will achieve our 2025 goals.”
Deutsche has emerged as the subject of merger speculation in recent months amid concerns about the bank’s profitability and reports that the German government is considering selling some of its stake in the bank, including a 15% stake in Commerzbank. There is.
But CEO Christian Sewing told CNBC at the World Economic Forum in Davos, Switzerland, that acquisitions are not a “priority” for Germany’s largest bank.
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Correction: This article has been updated to reflect Deutsche Bank’s financial results released on Thursday.
