FREE

Deutsche Bank Q1 2023 Results: Corporate Bank Supports Steady Improvement

Deutsche Bank (DB or the Bank) reported a Q1 2023 pre-tax profit of EUR 1.9 billion, up 12% Year-on-Year (YOY) and a net profit of EUR 1.3 billion, up 8% YOY, driven by very strong revenue performance at the Corporate Bank, and, to a lesser extent, at the Private Bank, partly offset by weakness in Investment Banking and Asset Management. Non-interest expenses increased by 1%, and as a result the cost income ratio (CIR) edged down further to 71% from 73% a year earlier. Credit costs increased by EUR 79 million YOY to EUR 372 million or 30 basis points in terms of Cost of Risk (CoR). Overall, this resulted in a return on average equity (ROAE) of 7.4%, up from 7.2% in Q1 2022. While we note again the strength of DB’s diversified business model, Investment Banking results were on the weaker side, especially in fixed income trading, where peers reported stronger results. That said, the strength in traditional banking segments should bode well for revenues for the remainder of the year. Generally, we expect the positive impact from higher rates to outweigh possibly lower business volumes in certain segments and potentially higher credit costs as the global economic outlook remains clouded.