Deutsche Bank reveals that revenues in trade finance are growing year-on-year, despite lower volumes of world trade, according to its second quarter results.
However, net revenues in the bank’s global transaction banking division were down by 3% to €653mn compared to Q2 2009. The bank puts this down to the negative impact of lower interest rates, which, Deutsche says, has been partly counterbalanced by “a positive impact of €55mn from a revision of the bank’s risk-based funding framework and market share gains in key products areas”.
The Q2 results, published on July 28, also reveal that within GTB revenues it is the domestic custody business that have been negatively affected by lower asset value, but revenues from other businesses remain stable. Trade finance activities are said to have benefited from new financing products in Europe and Asia, as well as gaining market share in US dollar clearing.
Overall, Deutsche has seen an increase in its second quarter net revenues, rising to €7.9bn, up 46% compared to €5.4bn, after mark-downs of €2.3bn in the second quarter of 2008.
Net income for the second quarter 2009 was up 67% reaching €1.1bn, compared to €645mn in the second quarter 2008.
For the first six months of 2009, net income was €2.3bn, versus €504mn in the first six months of 2008.
The current quarter results have been affected by the absorption of €1.4bn of specific charges, mainly in noninterest expenses and provision for credit losses. Yet, the bank states that these have in part been mitigated by €758mn of "specific positive revenue effects".
Commenting on the results, Josef Ackermann, chairman of the management board, says: “The outlook for the remainder of 2009 is strongly influenced by progress in the global economy.
He adds, “We have taken good advantage of improved conditions on financial markets, but we have also reduced costs and balance sheet risks, and strengthened our capital and liquidity base, all of which leaves us well-placed to confront near-term challenges.”
The bank’s balance sheet as a whole has been reduced by 6% during first quarter and by 31% since June 30, 2008. Deutsche increased its Tier 1 capital ratio to 11%.
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