Deutsche Bank shares up 7% after first-quarter profit beat, investment banking recovery

Deutsche Bank, Germany’s largest lender, has reported a strong first quarter with a 10% increase in net profit to 1.275 billion euros ($1.365 billion).

This positive result exceeded the analysts’ forecast of 1.23 billion euros.

The bank’s revenue also saw a modest increase of 1% to 7.8 billion euros, driven by growth in commissions and fee income, as well as strength in fixed income and currencies.

Notably, the investment bank division experienced a 13% surge in revenue, contributing to its status as Deutsche Bank’s highest-earning unit.

Deutsche Bank’s performance was bolstered by net inflows of 19 billion euros in its Private Bank and Asset Management divisions.

Additionally, the bank has maintained a solid financial position with a common equity tier one (CET1) capital ratio of 13.4%.

Amidst this positive outlook, Deutsche Bank remains committed to its cost-cutting initiatives, aiming to achieve 2.5 billion euros in operational efficiencies.

Despite the overall solid results, analysts have cautioned that the bank’s corporate bank and asset management divisions have underperformed.

Furthermore, credit losses remain elevated, and guidance has not changed despite higher interest rate expectations.

The market responded favorably to Deutsche Bank’s first-quarter report, with shares climbing to a more than six-year high.

This reflects investors’ confidence in the bank’s ongoing recovery and its ability to generate sustainable profits in the future.