Deutsche Bank posts 43-million-euro loss in Q1 2020 as virus bites

Agence France-Presse
Deutsche Bank posts 43-million-euro loss in Q1 2020 as virus bites

AFP

Germany's biggest lender Deutsche Bank also sets aside 506 million euros to deal with credit losses, around half of which it predicts will be due to the coronavirus

FRANKFURT AM MAIN, Germany – Deutsche Bank on Wednesday, April 29, posted a 43-million-euro ($46-million) loss in the 1st quarter despite a strong performance from its investment unit as Germany’s biggest lender grapples with a major revamp and the coronavirus fallout.

The net loss attributable to shareholders compared to a profit of 97 million euros over the same period a year earlier, but was still better than analysts had predicted.

Deutsche Bank had earlier said it was expecting a 66-million-euro profit for the first 3 months, before a large bond coupon payment pushed the lender into the red.

Group revenues were flat at 6.4 billion euros amid a tough global environment for banks, thanks in part to Deutsche’s long-struggling investment arm where turnover climbed 18% to 2.3 billion.

“In the current crisis, we have shown robust numbers and demonstrated strong performance in support of our clients across all core businesses,” said chief executive officer Christian Sewing.

The bank said it has set aside 506 million euros in provisions to deal with credit losses, around half of which it predicts will be “due to COVID-19.”

The coronavirus pandemic has battered the global economy and companies around the world are struggling to survive as efforts to curb the outbreak force them to close their doors or limit operations.

Governments and central banks have launched massive stimulus programs to encourage lenders to keep credit flowing to companies and households throughout the crisis.

In partially released earnings results last Sunday, April 26, Deutsche Bank said it had made the decision to allow capital “to fall modestly and temporarily below its target” to support clients through the turmoil.

Deutsche, which posted its 5th consecutive annual loss in 2019, had already embarked on a major restructuring to return to profitability before the coronavirus deepened the sector’s woes.

The overhaul calls for Deutsche to retreat from some activities and regions of the world it ventured into during breakneck expansion prior to the financial crisis.

Instead, bosses want to refocus the bank on its business with corporate clients and its home region of Europe.

Thousands of jobs are set to be scrapped under the revamp.

Deutsche said it had just over 86,600 full-time employees at the end of the 1st quarter, some 4,800 fewer than a year earlier.

The bank did not provide a full-year outlook. – Rappler.com

Add a comment

Sort by

There are no comments yet. Add your comment to start the conversation.