CORRESPONDENT IN BERLIN
Deutsche Bank announces its best result in the last ten years, with profits of around 3,400 million before taxes, which remain after taxes at 2,500 million euros, four times more than in the first year of the pandemic and well above than analysts expected on average. After deducting interest payments to holders of stock-like bondsthe final result is about 1,900 million clean euros, that allow us to say with a big mouth the first German bank is coming out of the tunnel.
In the whole of 2020,
Deutsche Bank returned to profit for the first time, after five straight years of lossesbut they were a relatively discreet 113 million euros and only in 2021 does it seem to take a cruising speed that allows us to talk about recovery.
“All four business areas are developing as planned or even better, and we have made faster-than-expected progress in reducing old stock," CEO Christian Sewing summed up. The expected costs of the group's restructuring, which began in 2019, have been almost completely digested. The bank also benefited in 2021 from having to set aside significantly less money for potential loan defaults than it did in the first year of the pandemic. But without a doubt the biggest source of profit was once again investment banking, in which bond and currency trading stands out. As a whole, the investment bank's contribution to profit increases by 4% in 2021.
As a result of these results and after two years in vain, Deutsche Bank shareholders will again receive a dividend of 20 cents per share for fiscal year 2021, which represents a capital distribution of 700 million euros. To achieve this, a major restructuring has been necessary to which the financial group has undergone since mid-2019. In the course of this process, entire departments have been closed, parts of investment banking that had borne greater risks have been sold, and harsh cost-cutting measures have been taken. The operation has cost around 18,000 jobs worldwide, about one in five as part of the conversion.
At its headquarters in the City of London and in New York, the day the layoffs began, in July 2019, he recalled the fateful day at Lehman Brothers in 2008. “Personally, I am sorry for the impact it is going to have on some of you », said the letter that the former employees have received and that some of the entity's employees will still receive, «in the long-term interest of our bank we have no other alternative than to carry out this decisive transformation». The economic costs related to the conversion are estimated at €1.5 billion in 2021, an increase of 21% compared to the previous year.
Sewing now welcomes the growing interest of clients in financing and sustainable investments. By the end of the year, the bank had made €157 billion available in this type of ESG product. “This means that we will probably be able to reach our goal of at least 200,000 million euros from 2022 and not at the end of 2023», as they had initially planned. The data therefore allows optimism and points to the survival of a bank that has come to be on the tightrope after the penultimate crisis, but it should be noted that the German banks, among which it is, are still not even close to the US bank profit figures. It is the consequence of the financial crisis of 2008 and 2009.
the banks in the United States they were rescued with gigantic financial packages, in Europe the aid was significantly less, he explains Christoph Shalast from the Frankfurt School of Finance. "In the end, US banks emerged stronger from the financial crisis, European banks, however, quite weak," explains the expert. “Also, a bank like Deutsche Bank, especially before 2007, relied on American investment banking and took big risks that they are still ruminating on today.” A peculiarity of the German financial culture, moreover, increases the degree of difficulty, because savings banks and Volksbanks compete with private banks. "The market shares that Deutsche Bank or Commerzbank, for example, have in the retail banking business are significantly lower than abroad, in Spain or in France, where the markets are much more consolidated," says Philipp Häßler, an expert of Pareto Securities, "and the competition continues to increase: the largest US bank, JP Morgan, wants to continue growing in Europe and open up to the middle class in the future."