Deutsche Bank announces first annual net profit since 2014

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fter six years of losses, Deutsche Bank finally reported a net profit of €624m ($748m) for the full year of 2020, attributable to a particularly strong performance within its investment banking division.

Remaining on target for all strategic and financial objectives, the bank recorded a profit before tax of €1bn. Group level revenues also increased by 4% to €24bn.

The firm’s Core Bank delivered significant full year growth, with profit before tax of €3.2bn and adjusted profit before tax up by 52% to €4.2bn whilst revenues grew by 6% to €24.3bn.

Profit growth within the Core Bank helped to offset costs of the Deutsche Bank’s transformation – now in its sixth quarter – together with elevated provisions for credit losses.

Cost reduction efforts remained on target, as the firm successfully cut noninterest expenses by 15% to €21.1bn, alongside a fall in ex-transformation charges and Prime Finance-related expenses of 9% to €19.5bn.

CEO, Christian Sewing, said: “In the most important year of our transformation, we were able to more than offset transformation-related effects and elevated credit provisions – despite the global pandemic. With profit before tax of a billion euros, we’re ahead of our own expectations.”

According to the firm, a strengthened Common Equity Tier 1 ratio and liquidity reserves of €243bn enabled the bank to support clients during 2020. Provision for credit losses was €1.8bn – 41 basis points of average loans – for the full year.

Investment Bank division gains
Within the core businesses, the Investment Banking division registered notably strong growth across the year, with net revenues up 32% to €9.3bn.