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Deutsche Bank Q2 2019



Deutsche Bank, a lender, reported an unexpectedly weak net loss of 3.15 billion euros for the second quarter of 2019.

Refinitiv analysts estimated second-quarter net loss at EUR 1.7 billion The bank's massive restructuring program was announced earlier this month.

The contested German lender posted a net profit of € 361 million in the prior-year quarter, but has since suffered a price drop and a new round of scandals.

Here are some important highlights of the quarter:

  • Net sales reached 6.2 billion euros compared to 6.59 billion euros in the previous year.
  • Tier 1
    capital ratio of 13.4% compared to 14.7% in the previous year.
  • Substantial cost of strategic transformation of 3.4 billion euros.

Earlier this month, Deutsche Bank announced that it would abandon its global equity business and cut 18,000 jobs by 2022. First, it was the turn of the executives Garth Ritchie, Sylvie Matherat and Frank Strauss to leave the bank at the end of this month.

"We have already taken important steps to implement our strategy to transform Deutsche Bank," said Christian Sewing, CEO of the Bank, in a statement.

"These are reflected in our results, and a significant portion of our restructuring costs are already being digested in the second quarter, and without consideration of transformation fees, the bank would be profitable and in our more stable business, revenues remained unchanged or increased."

Deutsche Bank also revealed that so far over 900 employees have been dismissed or have been announced to terminate their functions.

It was also clarified that without the cost of the strategic change, the net result would have been € 231 million, compared to € 401 million in the same period last year.

The Bank's stock has fallen more than 30% in the last 12 months, as a result of a variety of scandals related to historical failures in the fight against money laundering.

The post-restructuring outlook was skeptical for some Wall Street analysts raised questions about whether this was too radical and ambitious.

The bank expects the comprehensive reforms, including the creation of 74 billion euros (83.05 billion US dollars) "bad bank" by 2022 to cost 7.4 billion euros. Originally, a net loss of 2.8 billion euros was expected in the second quarter.

The lender also expressed concern about global trade tensions and the impact of persistently low central bank rates, with the European Central Bank (ECB) announcing Thursday its latest monetary policy decision. It is widely expected that ECB President Mario Draghi paves the way for a cut in the bank's deposit rate or a return to quantitative easing (QE).

"If these conditions persist over a longer period of time and are not compensated by measures such as the allocation of bank-retained reserves to the Eurosystem central banks, this could have a significant impact on revenues compared to our current expectations." Profit report of Deutsche Bank indicates.

"Measures to offset these effects on interest rates, such as price changes or the introduction of fees, may not be enough to offset these effects."


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