Great Britain

Bond trading surge returns Deutsche Bank to profit

Deutsche Bank returned to profit for the first time since early 2019 as a surge in bond trading and lower provisions for bad loans buoyed Germany’s largest lender.

The bank’s fixed-income trading revenues climbed 47 per cent in the third quarter, surpassing the average of 26 per cent recorded by its five largest rivals on Wall Street.

“While we benefited from some market tailwinds, the key driver of our outperformance has been the changes we have made to our business over the past year,” Ram Nayak, Deutsche’s head of fixed income and currency sales and trading, told the Financial Times.

Total revenue at Deutsche’s investment bank increased by 43 per cent in the quarter from a year earlier, and at €2.4bn, surpassed the first quarter, traditionally the strongest for investment banks.

The improved performance from Deutsche’s investment bank came as the lender reported an overall profit of €182m for the third quarter, compared with a loss of €942m in the same period a year ago. Analysts had expected a loss of €26m.

In the third quarter, Deutsche Bank earmarked €273m for credit losses compared with €761m in the second quarter. However, the figure was 20 per cent lower than analysts expected, as coronavirus-related headwinds abated quicker than anticipated over the summer.

This article has been amended to clarify that Deutsche Bank returned to profit for the first time in six quarters

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