FRANKFURT: Deutsche Bank on Thursday posted a bigger-than-expected drop in fourth quarter and 2024 full-year profit as legal provisions and restructuring costs eroded revenue gains at its global investment banking division.
Deutsche, Germany’s largest lender, also abandoned a key cost target, and it announced plans to buy back more shares.
The bank recorded net profit attributable to shareholders of 106 million euros ($110.43 million) in the quarter, down from a profit of 1.26 billion euros a year earlier. It is worse than analyst expectations for a profit of around 380 million euros.
For the full year, Deutsche recorded profit of 2.70 billion, down from 4.21 billion euros for 2023. That was worse than expectations of profit of nearly 3 billion euros.
The results set the stage for a crucial year for Deutsche as Chief Executive Officer Christian Sewing seeks to meet a series of ambitious profit and cost targets he has set to further underpin the once-troubled bank.
Some analysts have been sceptical that Deutsche will reach all its goals.
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The bank on Thursday abandoned a cost target for 2025, saying it wanted to make investments in business. It now aims for a cost-to-income ratio of below 65%, compared with previous plans for less than 62.5%.
“We have always said that 2025 will be decisive for us. At the end of this year, we will be judged by whether we have been successful with our transformation and growth strategy,” Sewing wrote in a memo to employees. The past year marked the fifth consecutive in the black after years of turmoil and losses.
Even so, over the past decade the bank has still lost more than it has earned.
A 15-quarter profit streak at Germany’s largest lender was interrupted in the second quarter last year after it made a large provision for investor lawsuits at its Postbank retail division.
Deutsche Bank is one of several big European banks publishing its quarterly report card in the coming weeks.
European banks on the whole are expected to report a sharp rise in profits for the final three months of last year, helped by still-robust margins from lending and bumper investment banking revenues.
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