Deutsche Bank: Loss in Q2 2024 on Legacy One-Off Postbank Litigation Hit, but Solid Underlying Performance

Deutsche Bank reported a net attributable loss of EUR 143 million in Q2 2024, compared with a EUR 763 million profit for the same period last year. As previously announced, results were affected by the Postbank takeover-related litigation costs of EUR 1.3 billion booked in the quarter. The Bank recorded a pre-tax profit of EUR 411 million for the quarter, compared with EUR 1.4 billion in Q2 2023. However, excluding the one-off, pre-tax profit was up 24% to EUR 1.7 billion, confirming the solid trend we have been observing in recent quarters.

Underlying results were supported by a moderate increase in revenues (up 2.4% YOY to EUR 7.6 billion) and lower noninterest expenses (down 4% YOY to EUR 5.4 billion), which offset higher credit costs (up 18.8% YOY to EUR 476 million). As expected, the strength in the Investment Bank division, driven by Origination and Advisory (O&A) as well as Asset Management businesses, continued to offset weaker Corporate Bank and Private Bank revenues.

"In our view, excluding the legacy Postbank charge, underlying earnings are solid and further place DB in line to reach its strategic targets of a revenue CAGR over 2021-2025 of 5.5-6.5% and operational efficiencies of EUR 2.5 billion by 2025", said Arnaud Journois, Senior Vice President of European Financial Institution at Morningstar DBRS.