Deutsche Bank Lifts Revenue, Payout Targets; To Cut 3,500 Jobs; Stock Up

(RTTNews) - Deutsche Bank AG shares were gaining more than 5 percent in the morning trading on Germany's XETRA, as well as in pre-market activity on the NYSE, after the German banking major Thursday raised annual growth targets for 2025, after reporting higher revenues in its fourth quarter. Net profit, meanwhile, was lower than last year with higher provision for credit losses.

Further, the bank announced plans to boost capital distributions, as well as reductions of around 3,500 jobs as part of its ongoing operational efficiency programme.

Christian Sewing, Chief Executive Officer, said, "We have achieved our highest profit before tax in 16 years, delivered growth well ahead of target and maintained our focus on cost discipline while investing in key areas. Our strong capital generation enables us to accelerate distributions to shareholders. This gives us firm confidence that we will deliver on our 2025 targets."

Under its Global Hausbank strategy, for 2025, the company now projects around 32 billion euros in revenues, with annual growth targets raised to between 5.5 percent and 6.5 percent from between 3.5 percent and 4.5 percent expected earlier, after substantially outperforming its original target in both 2022 and 2023.

Further, Deutsche Bank said it plans to increase both share repurchases and dividends by at least 50 percent year on year in 2024.

The bank plans to recommend 2023 dividends of 0.45 euro per share, up from 0.30 euro per share for 2022, at its Annual General Meeting in May 2024.

Deutsche Bank announced capital distributions of 1.6 billion euros in the first half of 2024 and now expects to exceed its goal of 8 billion euros in capital distributions to shareholders paid in 2022-26.

Subject to achievement of its published financial targets and to a payout ratio of 50 percent, the bank's updated guidance for a proposed dividend is 1.00 euro per share in respect of the financial year 2025.

Regarding its operational efficiency programme, the bank said it expects the programme's remaining savings of 1.6 billion euros to be driven by measures relating to infrastructure and technology efficiencies.

The vast majority of these measures are expected to be reflected in the adjusted cost run-rate in 2025.

The measures are expected to lead to a reduction of around 3,500 roles, mainly in non-client-facing areas. The bank has set a goal for a quarterly run-rate of adjusted costs of 5 billion euros and aims to operate with total costs of around 20 billion euros in 2025.

In its fourth quarter, the company's net profit attributable to shareholders was 1.26 billion euros, down 30 percent from last year's 1.80 billion euros. Pre-tax profit was 698 million euros, down 10 percent from 775 million euros a year ago.

The drop in profit reflects higher impairment charges as well as the non-recurrence of prior year gain on on the sale of Deutsche Bank Financial Advisors in Italy.

In the fourth quarter, provision for credit losses was 488 million euros, up 39 percent from last year's 351 million euros.

Net revenues of 6.66 billion euros went up 5 percent from prior year's 6.32 billion euros. Revenues grew 10 percent excluding specific items.

In the fourth quarter, Corporate Bank revenues were 9 percent higher year on year, and Investment Bank revenues grew 10 percent. Meanwhile, Private Bank net revenues fell 4 percent mainly on weakness in the International Private Bank. Asset Management revenues were down 5 percent year on year.

Assets under Management grew by 12 billion euros during the quarter, driven mainly by net inflows of 7 billion euros, primarily reflecting successful deposit campaigns.

For more earnings news, earnings calendar, and earnings for stocks, visit rttnews.com.

On Germany's XETRA, Deutsche Bank shares were trading at 12.63 euros, up 5 percent. In pre-market activity on the NYSE, the shares were trading at $13.62, up 6 percent.

For more earnings news, earnings calendar, and earnings for stocks, visit rttnews.com.