Deutsche Bank: Client Support Drives 11% Revenue Growth in Investment Banking

Investment banking helped drive revenue gains at Deutsche Bank in the third quarter, with growth in fixed income and currencies (FIC) and origination and advisory (O&A) leading the way.

The bank’s Investment Bank business saw 11% year-over-year growth in net revenues during the quarter, while Deutsche Bank’s overall net revenues were up 5%, according to a Wednesday (Oct. 23) earnings release.

In prepared remarks for the company’s Wednesday earnings call, Deutsche Bank CEO Christian Sewing attributed the Investment Bank business’ gains to “the ongoing commitment and focus of our business and coverage teams in supporting our clients.”

The Corporate Bank business’ net revenues declined 3% year over year, which the release said was due to normalizing deposit margins and, in business banking, lower net interest income compared to the strong levels seen a year earlier.

The Private Bank business’ net revenues were essentially flat, with net interest income declining as interest rates stabilized and investment products growing as the bank pursued greater non-interest income, according to the release.

In the Asset Management business, net revenues rose 11% year over year, with management fees gaining 6% and assets under management reaching a record 963 billion euros (about $1.04 trillion) at the end of the third quarter.

Overall, with its 5% year-over-year growth, Deutsche Bank’s net revenues reached 7.5 billion euros (about $8.1 billion) during the third quarter.

“Commissions and fee income grew 5% year on year to €2.5 billion, reflecting strong performance of fee and commissions-based businesses, and net interest income in the key segments of the banking book was broadly stable in an environment of further normalisation of interest rates as anticipated,” the bank said in the earnings release.

The Private Bank division made progress in its efforts to transform its Personal Banking unit, closing about 50 branches year to date “and more to come,” Sewing said in his prepared remarks.

Deutsche Bank said in September that it would close a “mid-double-digit number” of small branches in Germany while increasing its capacity to give advice via video and telephone, further investing in its app and other digitization, and adding more private banking centers, modern ATM and community events to its branches.