Germany’s largest money house has surprisingly brought in billions in profit. In order to drive profits further up, Deutsche Bank now wants to cut costs even more – also with new job cuts.
In the first quarter of the year, Deutsche Bank earned a total of 1.158 billion euros – nine percent more than in the same period last year. That clearly exceeded the expectations of the analysts, who had only expected an average of around 977 million euros. It is the eleventh consecutive quarter of earnings for the DAX group.
supreme pre-tax profit since 2013
Deutsche Bank also earned more than expected before taxes, at EUR 1.85 billion – an increase of twelve percent compared to the first three months of the previous year. According to Deutsche Bank, this is the highest pre-tax profit since 2013.
The results of the first quarter show that the bank is on the right track to “achieve or exceed the targets set by the board for 2025,” said CEO Christian Sewing.
Save at mortgage lending business
In order to drive profits further up, the board of directors wants to reduce costs even more than previously planned, as Germany’s largest financial institution announced today in Frankfurt. The additional cost savings should now add up to 2.5 billion euros. So far, 2.0 billion euros were targeted.
The DAX group wants to save costs by streamlining the construction financing business and further downsizing the technology center in Russia, but also by cutting jobs, especially in the private customer business and in infrastructure functions.
In the second quarter, the bank will begin to cut five percent of the jobs of higher earners in non-customer areas and to limit new hires, it said. How high the job cuts should be was not initially mentioned.
Deutsche Bank shares are picking up
What is clear, however, is the purpose of the cost savings: “We want to save more operational costs than previously planned and use our capital more efficiently in order to increase the distributions to our shareholders and our returns,” explained Sewing.
The quarterly figures and announced cost savings are also well received by investors: Deutsche Bank shares rose by 2.7 percent to EUR 9.63 in early trading on the Tradegate platform. Since the low of EUR 7.95 at the end of March, the price has recently been able to recover significantly. For the past six months, however, there has been a slight drop in the price.