Deutsche Bank says big-bang restructuring on track

Deutsche Bank’s net profits reached €401 million on the back of €6.6 billion in revenue. (AFP)
Updated 25 July 2018
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Deutsche Bank says big-bang restructuring on track

  • Analysts surveyed by data company Factset had earlier forecast profits of around €120 million
  • It finished integrating of subsidiary Postbank into its retail banking division in May

FRANKFURT: Germany’s biggest lender Deutsche Bank said Wednesday a major restructuring under its new chief executive was in full swing, as it confirmed second-quarter profits that beat analysts’ previous expectations.
Net profits reached €401 million ($468 million) on the back of €6.6 billion in revenue, in line with preliminary figures the lender released earlier this month.
Analysts surveyed by data company Factset had earlier forecast profits of around €120 million.
But the result was still 14 percent lower than last year’s second-quarter earnings of €466 million.
“We accelerated the reshaping of our bank significantly and proved the resilience of our global business” between April and June, said CEO Christian Sewing, who took over from crisis firefighter John Cryan in April with promises of a far-reaching shakeup.
Deutsche highlighted some €239 million in costs for restructuring and employee severance — twice as much as the same quarter last year — as around 1,700 workers left.
It added that it was “on track” to slash another 1,500 from its total headcount to dip below 93,000 by the end of the year, with a further ambition to shrink “well below” 90,000 by the end of 2019.
Meanwhile it finished integrating of subsidiary Postbank into its retail banking division in May.
And in its investment banking division, Deutsche reported “substantial” reductions in “leveraged” — or borrowing-fueled — holdings of stocks and bonds, accounting for most of an €85-billion reduction in such exposures across the bank.
There was slower progress on cutting costs, which fell 1.0 percent to €5.6 billion in adjusted terms in the second quarter.
But executives said they remained committed to reducing outlays from last year’s €23.8 billion to €23 billion in 2018.


Oil prices fall as economic growth worries spread

Updated 31 min 23 sec ago
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Oil prices fall as economic growth worries spread

  • China on Monday reported its lowest economic growth figure since 1990, with GDP rising by 6.6 percent in 2018
  • ‘The effects of OPEC-led cuts ... will undoubtedly place a price floor under crude oil’

SYDNEY/SINGAPORE: Oil prices fell on Tuesday as signs of a spreading global economic slowdown stoked concerns over future fuel demand.
International Brent crude oil futures were at $62.26 per barrel at 0410 GMT, down 48 cents, or 0.8 percent, from their previous close.
US West Texas Intermediate (WTI) crude futures were at $53.44 per barrel, down 0.7 percent, or 36 cents.
China on Monday reported its lowest economic growth figure since 1990, with GDP rising by 6.6 percent in 2018.
“Slowing manufacturing activity in China is likely weighing on demand,” said Singapore-based tanker brokerage Eastport on Tuesday, adding that industrial slowdowns tended to be leading indicators that only gradually fed into lower demand for shipped oil products.
In a sign of spreading economic weakness, South Korea’s export-oriented economy slowed to a six-year low growth rate of 2.7 percent in 2018, official data showed on Tuesday.
This followed the International Monetary Fund on Monday trimming its 2019 global growth forecasts to 3.5 percent, down from 3.7 percent in last October’s outlook.
“After two years of solid expansion, the world economy is growing more slowly than expected and risks are rising,” IMF Managing Director Christine Lagarde told reporters.
Despite the darkening outlook, oil prices have been getting some support from supply cuts that started in late 2018 by the Organization of the Petroleum Exporting Countries (OPEC).
“The effects of OPEC-led cuts ... will undoubtedly place a price floor under crude oil,” said Singapore-based brokerage Phillip Futures on Tuesday.