Deutsche Bank posts first annual profit in four years
February 1, 2019
After three straight loss-making years, Germany's biggest lender on Friday announced a full year profit for 2018.
Deutsche Bank has faced a host of challenges recently, including allegations of money laundering, ratings downgrades and failed stress tests.
The figures in detail
- The Deutsche Bank group reported €341 million ($390 million) net income in 2018.
- The previous year had seen a €735 million net loss.
- Profit before tax was €1.3 billion euros for 2018, up 8 percent versus 2017
- Fourth-quarter net losses had nonetheless been greater than expected at €409 million.
Read more: Deutsche Bank's 5 biggest scandals
'The right track'
"Our return to profitability shows that Deutsche Bank is on the right track," CEO Christian Sewing said.
"In 2019, we aim not only to save costs but also to make focused investments in growth. We aim to grow profitability substantially through the current year and beyond," he added.
The bank is set to continue cutting jobs after shedding 6,000 people in 2018. It now has around 91,700 full-time employees and it aims get under 90,000 by the end of the year.
Even with the recent positive news, the Frankfurt-based lender might end up merging with Commerzbank, its German rival. The government is reportedly in favor of the merger, aiming to provide Germany with a heavy-hitting bank on the global financial market.
Commenting on the merger speculation last week, Sewing said his priority was to restore profitability and that a merger was "beyond what I'm currently thinking of."
Read more: What's to become of Deutsche Bank?
New times under new CEO: Both the Deutsche Bank's reputation and its market value sank during a long period of mismanagement, with the 149-year-old bank worth €14 billion at the beginning of 2019. The latest data is a cause for celebration for 48-year-old Sewing, who took over as CEO last year with a promise of a new strategy and a major restructuring, including an intensive job-shedding drive. At the same time, the share price has dropped 30 percent since Sewing's appointment last April.
Raided over money laundering: Prosecutors believe the bank helped some 900 customers to set up offshore shell companies for transferring money from "criminal activities." They said some €311 million had been laundered, citing information from the so-called Panama Papers. The raids come almost two years after the lender agreed to pay US and British regulators $630 million in fines over artificial trades between Moscow, London and New York that authorities said were used to launder Russian money.
Read more: UK watchdog says Deutsche Bank is failing to limit crimes
Job cuts still planned: The bank's management lowered its projected cost target for 2019 to €21.8 billion. It pledged to achieve this by reducing the workforce to "well below 90,000."
dj/rt (dpa, Reuters)