Market expectations for the third quarter were crushed by the bank.
The bank had a net income of over one billion dollars for the quarter. The analysts had predicted a net profit of 825 million euros.
"We are seeing the benefit of interest rates come through in our corporate bank and private bank, essentially those with large deposit books and we are seeing our FIC business managing this environment extremely well."
The bank is on track to meet its goals, according to the CEO. The bank wants to get returns on average tangible equity to over 10% by the year 2025.
The highlights for the quarter were listed below.
Investment banking revenues increased at the bank. Lower performance in Credit Trading was offset by higher revenues in Fixed Income and Currency.
As has been the case with some of its U.S. peers, revenues in Origination and Advisory dropped 85% year on year.
Corporate Banking's revenues increased by 25% from a year ago.
The bank has further reduced its exposure to Russian credit. The bank has stopped doing business with Russia because of the invasion ofUkraine. The amount of additional contingent risk fell from the second quarter to the third quarter.
The German bank had higher provisions compared to a year ago. At the end of the third quarter, these came in at 350 million euros, compared to the previous year's 117 million.
These reflected a more challenging macroeconomic forecasts. Von Moltke said that he expects a recession in Germany in 2023.
The European Central Bank will continue to raise rates despite the poor growth expectations, according toDeutsche Bank. The main rate of the European Central Bank is zero.
We think terminal rates have begun to converge towards our view and we think they could be as high as 5% for the Fed and 3% for the European Central Bank. The central bank actions are supportive of getting inflation under control and that is important to us.
The shares of the bank are down. The bank made a profit of 1.046 billion euro in the second quarter.
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