A day to remember for Deutsche Bank which is about to close the stock market session with a rise of more than 10%, after filing the best quarter of the last seven years. Also contributing to the performance was the decision of the European Commission to "pardon" the German institute in the context of the investigation into a cartel created in the bond market. On the other hand, the other three banks under accusation were fined a total of 28,4 million euros.
THE DEUTSCHE BANK QUARTER
Let's talk about the quarterly. The leading German bank closed the first three months of 2021 with a Net income pertaining to 808 million euros, exceeding the consensus by 40%. The same period of 2020 had closed with a loss of 43 million.
THEpre-tax profit instead it stood at 1,6 billion euro from 206 last year. “'The results give us confidence that we will achieve our 2022 goals', commented CEO Christian Sewing. The quarterly performance was supported by the reduction of provisions to 69 million from over 500 million last year. Going forward with the parameters, the revenues rose by 14% to 7,2 billion thanks mainly to the results obtained by the investment banking division, whose turnover grew by 32% to 3,1 billion euros with taxable profit up by 134% to 1,5, XNUMX billion.
The performance recorded in fixed income and in currencies was also very positive, with revenues up 34% to 2,5 billion, as well as in Origination & Advisory (+40% to 644 million).
The Equity Origination division also showed strong growth, a result achieved thanks to "a continuous discipline of resources", with risk-weighted assets down by 4% and the cost/income ratio down to 52% from 63% last year. In Private banking, revenues amounted to €2,2 billion, unchanged on a yearly basis, with assets under management increasing by €26 billion to €519 billion in the quarter and pre-tax profit growing 92% to €274 million. Corporate Banking revenues fell by 1% to 1,3 billion, affected by currency effects, while taxable profit rose by 90% to 229 million.
In Asset Management, revenues rose by 23% to 637 million and assets under management recorded an increase of 28 billion, reaching a record 820 billion, "reflecting the favorable trend of the markets and currency movements", underlines the bank.
La net collection stood at 1 billion euro and the pre-tax result improved by 66% to 183 million. Group non-interest costs decreased by 1% to 5,6 billion in the quarter At the balance sheet level, the Cet 1 it increased to 13,7%.
THE BONDS CARTEL
Bank of America Merrill Lynch, Crédit Agricole and Credit Suisse fined 28,49 billion by the EU Commission for violation of antitrust rules. The three banking giants would in fact have participated in a cartel in the bond market. Deutsche Bank was also part of the match, which however was not fined for revealing the existence of the cartel. In detail, according to the Community Antitrust the four banks would have taken part in a cartel in the secondary trading market within the European economic area of Ssa bonds (sovereign bonds issued by supranational institutions or agencies, by governments and by government agencies and authorities public) denominated in dollars.
“Today we issued a decision against Bank of America Merrill Lynch, Crédit Agricole, Crédit Suisse and Deutsche Bank, whose traders colluded over trading strategies, exchange of sensitive information and price coordinates,” Commission Executive Vice President Margrethe Vestager said. , head of competition policy – The behavior of investment banks has limited competition in a market where investment and pension funds regularly buy and sell bonds on behalf of their investors and retirees. The cartel has damaged financial markets and today's decision sends a clear message that the Commission will not tolerate any kind of collusive behaviour”.
