Shares of Deutsche Bank AG were losing around 7 percent in the morning trading in Germany as well as in the pre-market activity on the NYSE after the banking major reported a loss in its second quarter, compared to prior year\'s profit, hit by a hefty litigation provision related to the takeover of Postbank AG. Revenues, however, grew mainly on the strength of double-digit growth in commissions and fee income.
Looking ahead, James von Moltke, Chief Finance Officer, said, \"Our second quarter and first half 2024 results position us well to deliver in 2025. .. we anticipate continued revenue momentum as our strategic growth investments bear fruit. We also see further scope for adjusted cost savings as our Operational Efficiency program progresses, and as we continue to put restructuring costs behind us and resolve legacy litigation matters. Furthermore, we expect credit provisions to normalize as interest rate pressures ease.\"
The bank now expects the full-year 2024 provision for credit losses to be slightly above 30 basis points, above prior guidance.
In its second quarter, loss attributable to shareholders was 143 million euros, compared to prior year\'s profit of 763 million euros.
Profit before tax was 411 million euros, down 71 percent from last year\'s 1.41 billion euros.
The latest results reflected a previously-announced 1.3 billion euros litigation provision related to the takeover of Postbank AG.
Excluding the provision, adjusted profit before tax was 1.7 billion euros in the latest second quarter.
Provision for credit losses was 476 million euros in the quarter, up from 401 million euros in the prior year quarter
The second-quarter revenues grew 2 percent to 7.59 billion euros from prior year\'s 7.41 billion euros.
Commissions and fee income increased 12 percent from last year to 2.6 billion euros. Net interest income in the key segments of the banking book was stable year on year. Meanwhile, Group reported net interest income was lower.
In the quarter, Corporate Bank net revenues were 1.9 billion, essentially flat, while Investment Bank net revenues grew 10 percent to 2.6 billion euros, and Asset Management net revenues went up 7 percent.
The improvement was partly offset by 3 percent drop in private Bank net revenues.
The bank further said its compound annual revenue growth rate over the last 12 months since 2021 was 5.7 percent at the end of the quarter, within the bank\'s raised target range of between 5.5 percent and 6.5 percent.
Deutsche Bank\'s target ratios were also impacted by the Postbank litigation provision, but improved year on year excluding this effect.
In Germany, Deutsche Bank shares were trading at 14.54 euros, down 7.31 percent.
In pre-market activity on the NYSE, Deutsche Bank shares at $15.83, down 7.10 percent.
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