FRANKFURT – Deutsche Bank saw net profit fall 58 per cent in the first quarter as turbulent financial markets deterred client activity and the bank pressed ahead with a costly restructuring of its business.
Germany’s largest bank made 236 million euros ($268 million) net profit, down from 559 million euros in the same quarter last year. Revenues fell 22 per cent, to 8.1 billion euros from 10.4 billion euros.
Still, the profit figure beat analyst expectations for a loss of 13 million euros.
The bank is in the midst of a wrenching transition as it tries to meet tougher regulatory requirements, cut costs and settle multiple legal investigations. It is shedding some 35,000 jobs and contractor positions through 2018 by dropping riskier or less profitable businesses, spinning off its Postbank retail bank division, and pulling out of 10 smaller countries. It didn’t pay bonuses to top managers for last year and cancelled its dividend for 2015 and 2016.
The bank said Thursday that volatile markets during the quarter hurt revenues at its market-related businesses including stock trading and asset management. The bank’s effort to downsize and get out of some business activities also depressed revenue.
Co-CEO John Cryan said that “our results reflect these challenging conditions.”
Global stock markets started the year with sharp drops amid fears about the impact of low oil prices and doubts about economic growth in emerging markets, then rebounded.
Deutsche Bank’s results were still an improvement on its 6.7 billion euro loss from all of last year, when the bank took write-downs for the fallen value of businesses and paid billions in litigation and restructuring expenses.
Cryan said that the bank was making progress in disposing of non-core businesses and in spinning off its Postbank retail banking business. He said that “2016 will be the peak year for our restructuring efforts.”