2020: Deutsche Bank's accounts are back in the green after 5 consecutive years of losses

  •   09/02/2021 - 08h38
  •   DEHOUI Lionel

After 5 consecutive years of losses, Germany's largest bank, Deutsche Bank, has finally put an end to this difficult situation. Indeed, the financial institution recorded very good profits for the financial year 2020. The good performance achieved by the company exceeds market expectations.

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2020: Deutsche Bank's accounts are back in the green after 5 consecutive years of losses

Deutsche Bank makes good profits in 2020

The year 2020 was the best year for Deutsche Bank in its 5-year history. After 5 consecutive years of losses, the German bank is back in good financial health. In the year 2020, the company achieved a net profit (group share) of 113 million euros. However, in 2019, it had recorded a deficit of 5.7 billion euros.

At the time, the bank was forced to cover huge depreciation and restructuring charges. This kept its accounts in the red for the fifth year in a row. The net result group share appeared in the green for the last time in 2014. In addition, last year Deutsche Bank made an estimated profit (before tax) of €1.02 billion, compared with a loss of €2.6 billion in 2019.

2.6 billion in 2019. As a result, the group's revenues have risen sharply. Revenues rose by 4% to EUR 24.03 billion. In addition, Germany's largest bank ended 2020 with a stabilised tier 1 capital ratio of 13.6%.

 

Profits above market expectations

Deutsche Bank's best results for 2020 are well above market expectations. The financial institution recorded better profits despite a 148% increase in provisions for credit losses to EUR 1.79 billion. 1.79 billion. In Q4, it performed better than expected.

The German bank achieved a taxable profit estimated at 175 million euros, compared to a deficit of 1.9 billion euros in 2019 and a consensus of -22.4 million euros. On the other hand, provisions for credit losses amounted to 251 million euros, compared to 247 million euros last year. Moreover, this amount is below the market forecast of 380 million euros.

380 million. The bank's revenues increased significantly, slightly exceeding market expectations. 5.45 billion, an increase of 2%. 5.45 billion. However, the market expected an estimated amount of

Deutsche Bank also performed well in its FICC (Fixed Income, Credit, Currencies and Commodities) brokerage business. This business generated revenues that jumped 17% to EUR 1.38 billion.

 

Cascading staff reductions within banks

The investment banks present in Europe and the United States had decided to take a break in their downsizing plans. However, as the cost of delinquencies soars, these financial institutions will have to resume implementation of their plan.

In fact, downsizing is very common among European banks. For example, in the third quarter of the year 2020, there was a 5% decrease in the number of staff at " front office " in Europe. The most affected sector is the equities business. For its part, the leading German bank, Deutsche Bank, plans to reduce its workforce from 87 000 to 74 000 by the year 2022.