Deutsche in Black for First Time in Four Years
Despite missing fourth-quarter targets, Deutsche Bank has reported a full-year profit for the first time since 2014, ensuring CEO Christian Sewing «will live to fight another day,» said one analyst.
Deutsche Bank's modest Q4 profit of $390 million was below consensus estimates but will likely be seen as a tipping point for the lender.
«Our return to profitability shows that Deutsche Bank is on the right track. Now, our priority is to take the next step. 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,» CEO Christian Sewing said in a statement.
Return on equity may be a more sticky point for Sewing – at just 0.4 percent, the bank is a long way off from the 10 percent it has been promising shareholders.
«Investment banking is a tricky business in that you cannot cut costs without impacting revenue,» said one banker at a rival bank, trying to explain why delivering on both costs and returns will be a difficult proposition.
Meanwhile, A Deutsche-banker said he believed fears over bonus, at least at the private bank, were overwrought in light of the day's results. "The drag [on profits] is clearly coming from the investment bank and cuts [to bonus] are likely to be focused on that side," he said optimistically. Total compensation at the corporate and investment bank for 2018 was at $4.5 billion across 37,726 total employees, an average of just over $100,000 per employee.
