Deutsche Bank posted a solid gain in its bottomline profit, beating forecasts for more third quarter gloom in Germany's biggest lender. However, net profit was down as restructuring costs weigh heavily.
Deutsche Bank was able to boost its pre-tax profit by 20 percent between July and September, as underlying earnings came in at 1.1 billion euros ($1.41 billion), according to the banks third-quarter report released on Tuesday.
Compared with the same quarter a year ago, overall revenue rose 18 percent to 8.7 billion euros.
Describing the result as a strong operating profit, Deutsche Bank co-chief executives Anshu Jain and Jürgen Fitschen attributed the rise to an improvement in market conditions, notably in the investment banking sector. The bank's revenue from corporate banking and securities soared 65 percent on the back of increased market activity.
However, net profit at Germany's biggest bank slipped slightly by 3 percent from 777 million euros in the third quarter of 2011 to 755 million in the same period this year.
The earnings dip was primarily a result of huge internal costs accumulated as the bank seeks to shed 2,000 employees by 2015 in a restructuring drive aimed at saving 4.5 billion euros in annual costs.
Between July and September alone, Deutsche Bank spent 222 million euros on severance pay in its investment banking division under a program which earmarked 600 million euros for this in 2012.
"So far we've been able to shed 1,200 of the 1,500 jobs we've planned to cut in 2012. The remaining number of jobs will be gone by the end of the year," the bank's chief financial officer Stefan Krause said in a telephone conference with investors on Tuesday.
In its earnings outlook for the final quarter of 2012, Deutsche Bank remained cautiously optimistic. The bank's two CEOs said they perceived the banking environment to remain uncertain in the near term, forcing them to maintain a cautious and risk-focused approach.
uhe/jlw (AFP, AP, Reuters, dpa)