Deutsche Bank reports weaker Q4 profit due to legal provisions, launches share buyback

From CNBC: 2025-01-30 11:54:18

Germany’s Deutsche Bank reported a weaker-than-expected profit in Q4 2024, attributing it to legal provisions. Net profit was 106 million euros, down from 282.39 million euros forecast. Full-year net profit fell 36% to 2.698 billion euros. Despite the drop, the bank launched a 750 million-euro share buyback.

The bank’s CFO admitted to high non-operating costs in 2024, largely from past issues like litigation. Deutsche Bank targets a cost-income ratio of below 65% this year. Fourth-quarter highlights include profit before tax of 583 million euros, provision for credit losses of 420 million euros, and a CET 1 capital ratio of 13.8%.

Deutsche Bank saw robust performance in investment banking operations, with revenues up 30% year-on-year in Q4. European banks are adjusting to the end of high interest rates. German banks face challenges from a dim economic outlook and political volatility. Deutsche Bank could benefit from uncertainty surrounding Commerzbank’s fate.

Deutsche Bank has been investing in its U.S. operations, which now account for 20% of measures like balance sheet and revenue. The bank expects to benefit from these investments in the future. Market participants are watching for potential regulatory changes under President Donald Trump’s administration.

Read more: Profit falls and cost target scrapped