Deutsche Bank's FIC Trading Desk Revenues Slump by a Third

Marco Green
October 26, 2017

The German bank said net income in the quarter was EUR649 million ($766.7 million) compared with EUR278 million in the same period a year ago, helped by lower operating costs and legal expenses.

Shares in Deutsche Bank were down 1.6 percent in early trading.

Equities sales and trading revenues also suffered a double-digit decline of 15% to finish the quarter at €525m.

Deutsche Bank's corporate and investment bank unit reported a decline in revenues of 23 percent to €3.5 billion. Deutsche Bank traditionally has relied more heavily on fixed-income trading for profits than many of its peers have. The bank saw less income because of low interest rates, which squeezes lending margins, and as calmer financial markets led clients to trade less.

He added that benefits will "become more apparent in the coming quarters and years". The big US investment banks' bond trading revenues fell on average 22 percent from a year earlier.

The chief contributor to the top line fall was the fixed income and currency sales and trading business.

Revenues in the private and commercial bank were up 3%, to EUR2.6 billion.

Revenues in the asset-management unit were stable for the quarter at EUR628 million.

In asset management, Deutsche Bank has asked banks to pitch for work on an initial public offering (IPO) of its asset management business, which it wants to legally separate from the bank by year-end, in a deal that could raise around 2 billion euros.

On Thursday, Deutsche Bank said it was strengthening its asset management unit by integrating parts of its Sal. "Deutsche Bank has a long, long way to go", said Octavio Marenzi, CEO and founder of consultancy Opimas.

Those moves come amid a prolonged restructuring period and strategic decisions seen by analysts and investors as still unproven.

Deutsche Bank earlier this year settled a big USA probe into crisis-era sales of mortgage securities and raised $8.5 billion in a share sale, putting immediate fears about inadequate capital to rest. Barclays attributed the slump to similar businesses and also blamed the "integration" of unwanted assets from a non-core unit back into the investment bank, according to its presentation.

Despite the performance of the trading desk at Deutsche, the company's profitability increased when compared to the previous year.

Other reports by Click Lancashire

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