Deutsche Bank made its record-breaking profit since 2011 after it challenged expectations for a loss in the fourth quarter following revenue gains at its investment bank during a deal-making boom.
Thursday’s figures are a milestone for the Chief Executive Officer Christian Sewing, who was designated to the top job in 2018 to turn Deutsche around past a series of embarrassing and costly regulatory filings, including over money laundering.
“This year we can finally prove to the market that we are sustainably profitable,” Sewing said in a message to employees. The net profit credited to shareholders was 145 million euros ($163 million) in the three months ended Dec. 31. That correlates with a profit of 51 million euros in the previous year, and underscored analyst expectations for a loss of around 130 million euros.
For the year, Deutsche experienced a profit of 1.94 billion euros, up sharply from 113 million euros a year earlier. Sewing endorsed that the bank was on the path to achieving a key profitability target in 2022, a return on tangible equity of 8% that many analysts have forecast the bank will miss.
Despite the annual profit, the bank has still lost more than 10 billion euros over the past decade. Once Deutsche’s sore spot, the investment bank has turned an important revenue generator, profiteering from a pandemic-induced trading boom and a wave of dealmaking that has lifted banks across Wall Street.
Revenue at the unit rose 1% to 1.913 billion euros in the fourth quarter from a year earlier. The investment bank’s advisory business stood out amid a deal-making boom, with revenue surging 156%. Revenue for fixed-income and currency trading, one of the bank’s largest divisions, fell 14% from a strong period a year earlier as markets calmed from their pandemic trading frenzy.