Deutsche Bank boosted its bottom line strongly in the third quarter thanks to cost-cutting and lower risk provisions, figures showed Friday, but Germany's biggest bank is still a long way from achieving the profitability targets it has set itself for next year.
Deutsche Bank said in its interim report that it booked net profit of 680 million euros (860 million dollars) in the period from July to September, 18 percent more than in the corresponding period a year earlier.
Pre-tax profit was up 33 percent at 1.0 billion euros.
Both figures were at the top end of analysts' expectations and chairman Josef Ackermann said net profit was the highest quarterly result the bank had ever achieved under US GAAP accounting rules.
"We achieved this result despite the persistently difficult market environment," Ackermann boasted.
Deutsche Bank certainly made headway on the cost front and in lowering its exposure to bad or risky loans.
Risk provisions were cut in half in the three-month period to 83 million euros.
And general administrative costs were also lowered by six percent to 3.97 billion euros. But a closer look at the figures showed that the quality of the earnings was mixed. Net interest income after risk provisions, for example, fell to 1.075 billion euros from 1.438 billion euros and net commission income was down by 3.8 percent at 2.29 billion euros.
Only own-account trading income shot up by 35 percent to 1.27 billion euros.
And a key profitability yardstick, the pre-tax return on equity, stood at 20 percent at the end of September, way below the 2005 goal of 25 percent.
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