Deutsche Bank & Private Banking Reports Strong Q2 2022 Results with $1.53 Billion Profit
28th July 2022 | Singapore
Deutsche Bank has reported profit before tax of $1.53 billion (€1.5 billion) for 2022 Q2, the highest Q2 profit since 2011. Deutsche Bank International Private Bank (IPB): “The Private Bank made another strong contribution to the group results, recording net revenues of EUR 2.2 billion, up 7% year on year. The IPB has continued to deliver solid revenue growth and significant inflows in Assets under Management (AuM). In the second quarter, the business generated total revenues of EUR 834 million, up 2% year on year, or up 6%, if excluding Sal. Oppenheim (Sal.Opp) workout activities. The IPB attracted net inflows in AuM of EUR 5 billion in the quarter, driven by EUR 3 billion in investment products and EUR 2 billion in deposits. The business recorded EUR 2 billion in Net New Loans (NNL), slightly improved compared to last quarter. Claudio de Sanctis, Global Head of the International Private Bank (IPB) and CEO EMEA: “The IPB’s strong performance during some of the most difficult conditions we have seen in recent memory, shows our strategic transformation programme is on track, and our focused execution is delivering results. Even with ongoing geopolitical instability and difficult macro conditions, the IPB delivered another solid quarter, marking the tenth consecutive quarter of positive net flows in AuM and the ninth straight quarter of positive NNL. The IPB’s second quarter performance not only reflects the successful execution of our transformation strategy, but also disciplined risk management.” See below for revenue, profit and financials on Deutsche Bank Private Banking & Asset Management businesses.
“ Deutsche Bank & Private Banking Reports Strong Q2 2022 Results with $1.53 Billion Profit “
Deutsche Bank International Private Bank Q2 2022 Results
The Private Bank made another strong contribution to the group results, recording net revenues of 2.2 billion euros, up 7 percent year on year. For the first half of 2022, the PB’s post-tax Return on Tangible Equity (RoTE)1 was above 9 percent, compared to 2 percent in the first half of 2021. The IPB has continued to deliver solid revenue growth and significant inflows in Assets under Management (AuM). In the second quarter, the business generated total revenues of 834 million euros, up 2 percent year on year, or up 6 percent, if excluding Sal. Oppenheim (Sal.Opp) workout activities. The IPB attracted net inflows in AuM of 5 billion euros in the quarter, driven by 3 billion euros in investment products and 2 billion euros in deposits. The business recorded 2 billion euros in Net New Loans (NNL), slightly improved compared to last quarter.
In today’s considerably challenging macro and geopolitical environment, the IPB achieved many successes in the second quarter.
- The business took an important step to more closely align externally reported segments to its business proposition, by renaming the reported client segments to Wealth Management & Bank for Entrepreneurs (BfE) and Premium Banking. Despite challenging market conditions, revenue in Wealth Management & Bank for Entrepreneurs increased by 1 percent year on year to 598 million euros, or 7 percent if adjusted for Sal.Opp. Growth reflected loan growth and higher deposit revenues in a rising interest rate environment and was supported by FX movements. In Premium Banking, revenues were up 3 percent to 235 million euros, largely driven by consumer finance and higher deposit revenues.
- Continued investing in front office hires across regions; for example, increased the WM & BfE Relationship Manager population by 7 percent versus the prior year, including 21 RM hires in Spain in the second quarter.
- Arranged marquee client financing across regions: IPB Americas was lead advisor for the multi billion euro acquisition of a leading global sporting club; IPB EMEA arranged around 250 million euros for a Technology business private placement with the Investment Bank (IB); and IPB APAC completed a joint venture financing with the IB’s fixed income business for around 1 billion euros in net flows.
Deutsche Bank Reports Profit before tax of €1.5 billion for Q2 2022, Highest Q2 Profit since 2011
The core businesses contributed as follows to the Core Bank’s profit growth:
- Corporate Bank: profit before tax of €534 million, more than double year on year, with post-tax RoTE1 of 13.4% and cost/income ratio of 62%
- Investment Bank: profit before tax of €1.1 billion, up 1%, with post-tax RoTE1 of 11.4% and a cost/income ratio of 57%
- Private Bank: profit before tax of €463 million, versus a €15 million loss before tax in the prior year quarter, post-tax RoTE1 of 9.9% and a cost/income ratio of 74%
- Asset Management: profit before tax of €170 million, down 6% year on year, post-tax RoTE1 of 18.6% and cost/income ratio of 67%
Christian Sewing, Deutsche Bank CEO:
“With the best half-year profits since 2011, we have proven – once again – that we can deliver growth and rising profits in a challenging environment. We are particularly pleased with the progress of our Corporate Bank and Private Bank. Thanks to our successful transformation, we’re well on track to deliver sustainable and well-balanced returns through our four strong core businesses.”
Private Bank Revenue
Private Bank net revenues were € 2.2 billion, up 7% year on year, or 4% if adjusted for two effects: a significant reduction in forgone revenues from the ruling by the German Federal Court of Justice (BGH) in April 2021 regarding pricing changes on current accounts, partly offset by lower revenues from Sal. Oppenheim workout activities. Revenues in the Private Bank Germany were up 11%, or 3% if adjusted for the reduced impact of the BGH ruling, while the International Private Bank grew revenues by 2%, or 6% if adjusted for the effect on revenues of Sal. Oppenheim workout activities. Net new business volumes were € 11 billion in the quarter. This included net inflows of € 7 billion, including inflows into investment products of € 5 billion and new deposits of € 2 billion, and net new client loans of € 4 billion. For the first six months, net revenues were up 4% to € 4.4 billion and net new business volumes were € 24 billion.
Asset Management Revenue
Asset Management net revenues rose 5% year on year to € 656 million. This development was predominantly driven by a 6% rise in management fees to € 619 million, partly reflecting inflows in previous quarters, while performance and transaction fees were up 69% to € 31 million. Net outflows were € 25 billion, driven almost entirely by outflows of low-margin cash products in a challenging macro-economic environment, of which the majority returned during July. Net outflows excluding cash products were essentially zero, as net inflows from active Equity, Multi-Asset and Alternatives offset outflows in Passive products. Assets under management were € 833 billion at quarter-end, down 3% versus the prior year quarter, reflecting the aforementioned net outflows together with market conditions, partly offset by FX movements. For the first six months, net revenues were up 6% to € 1.3 billion.
About Deutsche Bank
Deutsche Bank provides retail and private banking, corporate and transaction banking, lending, asset and wealth management products and services as well as focused investment banking to private individuals, small and medium-sized companies, corporations, governments and institutional investors. Deutsche Bank is the leading bank in Germany with strong European roots and a global network.
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