Deutsche Bank delivers record Q1 profits, shares fall on credit provisions

(Sharecast News) - Shares in Deutsche Bank fell on Wednesday despite the German banking giant beating analysts' estimates with record first-quarter profits, as the group reported a higher-than-expected credit loss provision. The bank reported €519m of provisions for credit losses during the quarter, up 10% over the year before, which include overlay reflecting "macro-economic uncertainties" and a single commercial real estate exposure within investment banking.

However, for the rest of the year, the firm continues to expect a year-on-year improvement in credit losses in a "normalised environment", as it held on to its other full-year targets.

Despite the higher loss provisions, Deutsche Bank still reported €2.17bn in net profits for the quarter - the highest on record for a quarter and 8% ahead of the previous year, beating market forecasts.

Net revenues were 2% higher than the previous year at €8.67bn. Private bank revenues were up 5% at a record €2.57bn and asset management revenues growing 11% to €802m, outweighing a 3% decline in corporate banking revenues to €1.82bn and a flat performance in the investment bank (revenues were only marginally ahead of last year at €3.37bn).

Meanwhile, total assets under management in the private bank and asset management swelled to €1.8trn, up €146bn over the year, helped by €22bn of net inflows.

The return on average tangible shareholders' equity improved to 12.7% from 11.9% the year before, while the cost/income ratio dropped to 58.9% from 61.2%.

Chief financial officer Raja Akram hailed it as a "strong performance", helped by "a high-quality earnings mix and durable growth".

"We're building growth momentum in high value businesses through targeted investments and deliberate capital allocation, and further cost flexibility through AI and process reengineering across the bank," he said.