First profit in six years! Deutsche Bank achieves net profit of 113 million euros in 2020

Deutsche Bank released its fourth-quarter 2020 financial report on the 4th, showing that in 2020, it will achieve the first profit since 2014.

The quarterly report shows that Deutsche Bank’s fourth-quarter revenue was 5.453 billion euros, a year-on-year increase of 2%, and its quarterly profit was 189 million euros. In the quarter, asset management income was 599 million euros, investment banking revenue was 1.89 billion euros, and the net profit was 51 million euros, far better than market expectations.

For the whole year of 2020, the bank achieved a net profit of 113 million euros attributable to shareholders, the first annual profit attributable to shareholders since 2014, and a loss of 5.7 billion euros in 2019. Analysts had previously predicted that Deutsche Bank would lose about 300 million euros in 2020. The bank’s stock performed best among large European investment banks in 2020, but it is still 90% below its 2007 high.

In the past 10 years, Deutsche Bank has lost a total of 8.2 billion euros. Analysts predict that the bank is expected to profit again in 2021.

Zewin, CEO of Deutsche Bank said,

Despite these difficult times, we have laid a solid foundation for sustainable profitability and are confident that this positive trend will continue in 2021.

The investment banking sector’s revenue in 2020 increased by 32% to 9.28 billion US dollars; important fixed income and foreign exchange sales and trading business revenue increased by 28%.

In addition to being driven by the strong performance of investment banking, Deutsche Bank’s performance improvement is largely due to the effect of layoffs and expenditures. Deutsche Bank laid off 350 employees in its retail banking centres in Frankfurt and Bonn, Germany in December last year, accounting for a large proportion of the original 1,000 employees.

The layoffs will be implemented through resignation compensation or early retirement, and it is expected to continue until the end of 2022. The layoffs are not a separate incident, but part of the restructuring plan announced by Deutsche Bank in 2019, which is expected to cut a total of 18,000 employees.

Deutsche Bank’s future performance pressure to a certain extent comes from factors such as litigation fines and the new crown pneumonia epidemic.

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