Deutsche Bank Q4 pre-tax profit hits 15-year high, but misses estimates

By Scott Kanowsky 

Investing.com -- Deutsche Bank AG NA O.N. (ETR: DBKGn ) has reported lower-than-expected top and bottom-line results in the fourth quarter, but still registered strong annual gains.

Net revenue during the final three months of the year jumped by 7.1% compared to the same period in 2021 to €6.32 billion (€1 = $1.0988).

Nearly a fourth of this figure stemmed from the bank's fixed income and currencies division, where revenues surged by 27% to €1.5B - its best fourth quarter in more than a decade, but below the average of 28% reported by its U.S. peers. Private banking revenues also increased by more than a tenth thanks to an elevated interest rate environment, favorable foreign exchange movements and larger business volumes.

The returns helped fuel a ninefold rise in pre-tax profit to €775M. However, Bloomberg consensus estimates had seen quarterly income before tax at €1.25B on net revenues of €6.5B.

Shares in Deutsche Bank fell in early European trading on Thursday.

On an annual basis, net profit more than doubled year-on-year €5.7B, marking the highest level in 15 years. Net revenue also climbed by 7% to €27.2B, driven in part by heightened market activity and client flows at the fixed-income division.

Deutsche Bank's post-tax return on average tangible shareholders' equity - a gauge of efficiency and future profitability - moved up to 9.4% in 2022 from 8.4% in the prior year. As part of a broader restructuring effort, Deutsche Bank has been aiming to reach a level of above 10% by 2025.

“We have delivered revenue growth in our core businesses and continued cost reductions," said Chief Financial Officer James von Moltke in a statement.