German Bank (DBK.DE) quadrupled its annual profit in 2021 to €2.5bn (£2.1bn/$2.79bn), its highest profit in 10 years.
The German bank’s better-than-expected result was driven by its investment arm, which generated nearly two-fifths of the group’s revenue for the year as a whole.
Net profit for the full year quadrupled from a year earlier to 2.5 billion euros, the highest since 2011. Revenue rose 6% to 25.4 billion euros.
For the fourth quarter, the German lender posted 315 million euros in profit despite higher remaining restructuring expenses, including severance payments. Analysts had expected a profit of 26 million euros.
“In 2021, we quadrupled our net profit and achieved our best result in 10 years while putting almost all of our planned transformation costs behind us,” CEO Christian Sewing said at a press conference.
Deutsche Bank launched a major overhaul in 2019 that involved cutting 18,000 jobs through 2022 to reduce the number of employees worldwide to 74,000.
“You all know how turbulent the years between 2016 and 2018 were for our bank. At the time, we seemed to have entered a downward spiral,” Sewing said.
“The downward spiral turned into an upward spiral.”
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Sewing added that the bank has already recognized most of the expenses related to its overhaul, which include severance payments for workers who departed. The number of bank employees decreased by around 8,000.
The windfall profits paved the way for Deutsche Bank to resume paying dividends, worth 400 million euros this year. It is the first time since 2019 that the bank will make a payment to shareholders.
“We are excited to resume capital distributions to our shareholders as we promised in the summer of 2019,” Sewing said. The bank will buy back 300 million euros worth of shares.
The bank’s share price has risen more than 30% in the past year and jumped nearly 6% following the reported results.
The results come after years of underperformance and scandals.
Germany’s finance regulator has fined Deutsche Bank for weak controls and the US markets regulator has fined £120m “for significant compliance failures” in the bank’s dealings with the accused child sex trafficker Jeffrey Epstein, as well as with two client banks.
“Our relationship with all regulators has improved significantly over the past two years. We know exactly where we still have work to do (…) improve the weak points that we have, for example, the fight against money laundering,” Sewing told reporters.
Deutsche’s corporate banking business saw pre-tax profit hit 1 billion euros, up 86%, while its private banking followed last year’s pre-tax loss with a profit of 366 million euros.
At the same time, Deutsche Bank’s asset management division saw its taxable profit increase by 50% to €816 million.
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