Deutsche Bank (DBK) Fixed Income Update summary

Financial performance and profitability

• Pre-provision profit rose 17% year-on-year to €4.7 billion, excluding litigation provisions, while profit before tax was €411m in Q2, or €1.7bn excluding a €1.3bn Postbank litigation provision.

• Revenues grew 2% year-on-year to €7.6bn in Q2 2024, with H1 revenues at €15.4bn, on track for €30bn full-year guidance.

• Commissions and fee income increased 12%, driven by capital-light businesses, with double-digit growth in Q2.

• Adjusted costs were €5.0bn in Q2, in line with guidance, with €1.5bn in realized or expected savings from efficiency programs.

• Cost/income ratio was 88% in Q2 (71% ex-litigation), and tangible book value per share rose 6% year-on-year.

Business segment highlights

• Corporate Bank achieved a 16% increase in incremental deals with multinationals and strong fee income momentum.

• Investment Bank's Origination and Advisory market share rose to 2.6%, with Q2 profit before tax up 25% YoY and revenues up 10%.

• Fixed Income and Currencies revenues grew 3% year-on-year, with financing revenues up 7%.

• Private Bank saw €19bn net inflows, €34bn growth in assets under management, and 12% deposit growth year-on-year.

• Asset Management AUM increased by €37bn to €933bn in H1 2024, with strong inflows into passive products.

Credit quality and provisions

• Provision for credit losses in Q2 was €476m, or 40 bps of average loans, with H1 provisions at €915m.

• Full-year guidance for credit loss provisions revised to slightly above 30 bps of average loans due to CRE pressure.

• Stage three provisions decreased, mainly due to the Private Bank, while Corporate Bank saw increases from two large impairments.

• CRE portfolio remains under pressure, especially in the US office sector, with stress-tested non-recourse CRE portfolio at €30.5bn.

• Allowance for credit losses at €5.5bn as of June 30, 2024.