After the collapse of Silicon Valley Bank (SVB) in the United States triggered fears of a banking crisis, Germany's largest bank, Deutsche Bank, posted strong first-quarter results. Net profit for the period increased by 8%, continuing an 11-quarter streak of profitability.
On the 26th (local time), Deutsche Bank announced in its earnings report that first-quarter net profit rose 8% year-on-year to 1.32 billion euros, up from 1.23 billion euros in the same period last year. This significantly exceeded market expectations of 1.17 billion dollars.
Revenues for the period increased 5% year-on-year to 7.68 billion euros. By segment, corporate banking and retail banking revenues rose 35% and 10% respectively compared to the same period last year, while investment banking revenues fell 19%.
Deutsche Bank's Liquidity Coverage Ratio (LCR) stood at 143%, maintaining a similar level to the end of the previous quarter (142%). This indicator represents the ratio of assets that can be quickly converted to cash relative to cash outflows over 30 days, meaning the bank has ample liquidity to handle sudden deposit withdrawals.
However, deposits in the first quarter decreased by 5% compared to the previous quarter. This was due to a series of bank runs triggered by the liquidity crisis that began with the SVB collapse in the US last month and subsequently brought down Credit Suisse in Europe, causing global panic.
The company stated, "Although deposits in the first quarter decreased compared to the end of last year, they returned to an upward trend in April."
James von Moltke, Deutsche Bank's Chief Financial Officer (CFO), said during a conference call after the earnings announcement, "As March ended and April began, the banking crisis disappeared as if a light switch had been turned off."
The company explained that this quarter's results demonstrate that their strategy is on track to achieve or exceed their 2025 targets.
They added, "Considering the strong performance and improved capital ratios, we will begin share buybacks in the second half of this year."
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