Germany's struggling lender Deutsche Bank says it's making quicker progress in cutting costs and reshaping its business model. The bank's second-quarter profit also beat analyst estimates.
Germany's biggest lender Deutsche Bank said Wednesday a major restructuring under its new chief executive was in full swing, as it confirmed second-quarter profits that beat analysts' previous expectations.
Net profits reached €401 million ($468 million) on the back of €6.6 billion in revenue, in line with preliminary figures the lender released earlier this month.
Analysts surveyed by data company Factset had earlier forecast profits of around €120 million. But the result was still 14 percent lower than last year's second-quarter earnings of €466 million.
Christian Sewing took over from crisis firefighter John Cryan in April with promises of a far-reaching shakeup
"We accelerated the reshaping of our bank significantly and proved the resilience of our global business" between April and June, said CEO Christian Sewing, who took over from crisis firefighter John Cryan in April with promises of a far-reaching shakeup.
Scaling back ambitions
Deutsche highlighted some €239 million in costs for restructuring and employee severance — twice as much as the same quarter last year — as around 1,700 workers left.
The bank confirmed its target of fewer than 93,000 employees by year end and "well below" 90,000 by the end of 2019.
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Meanwhile, it finished the integration of subsidiary Postbank into its retail banking division in May.
In recent years, the German lender has struggled with low profits and high costs, and with billions in charges for regulatory and legal violations. The bank agreed in late 2016 to pay $7.2 billion as part of a settlement with US authorities over its sales of bonds backed by mortgages to people with shaky credit.
Sewing has said the bank will cut personnel at its investment banking business — source both of high costs and volatile profits — and scale back its global ambitions to compete with American peers on Wall Street by focusing on European and German clients and cutting back on activities where it doesn't hold a market-leading position.
sri/tr (AFP, AP)