Feb 04, 2021 05:00 AM EST
Deutsche Bank on Thursday shocked many how well it fared during the coronaviurs crisis. Analysts did not expect it to perform as well though, given their earnings projections. However, the lender's investment banking division certainly boosted its performance, beating their negative earnings expectations set forth for the 2020.
Germany's largest lender was able to earn a full-year net profit of $135.7 million. Analysis had actually expected it to not earn a cent; instead, they saw it making a huge loss of 201 million euros, according to Refinitiv.
Deutsche reported a 5.7 billion euro loss for 2019, due to a major restructuring.
The bank netted a 51 million euro profit for the fourth quarter, which is no small feat, since analysts were projecting it to make a 325 million euro loss.
The bank's CFO, James von Moltke, told CNBC shortly after the announcement that the bank was even able to achieve all of its goals for the year.
Even though the year was certainly ruined by the pandemic, and the banking industry definitely was not spared, Deutsche Bank's higher revenues and cost reductions helped its investment banking division perform well, boosting the whole bank's performance. The investment banking division' revenues increased by a whoppping 32% to 9.8 billion euros in 2020.
In its statement, the bank said this "more than offset a rise in provision for credit losses resulting from COVID-19.
Apart from this astounding earnings performance, the bank also saw an increase on its total Q4 net revenues compared to the same timeframe in 2019. Total fourth-quarter net revenues attained were 5.5 billion euros. In Q4 2019, the bank only achieved net revenues of 5.35 billion euros. The group net revenues for the 2020 is at 24 billion euros, which represents a 4% increase from 2019.
In addition, its Common equity tier 1 (CET1) ratio, is computed to be at 13.6%. This essentially stayed the same from from the fourth quarter of 2019. Since this ratio measures bank solvency, for it to not have changed despite the trying year, is a remarkable achievement.
Fourth-quarter loan loss provisions were 251 million, significantly lower than the provisions of 723 million in the final quarter of 2019.
"In the most important year of our transformation, we were able to more than offset transformation-related effects and elevated credit provisions - despite the global pandemic," CEO Christian Sewing shared of its earnings report.
"We have built firm foundations for sustainable profitability, and are confident that this overall positive trend will continue in 2021, despite these challenging times," the CEO proudly added.
Before the earnings are reported, an interview with Matthew Fine, a portfolio manager, has somehow anticipated this positive turn of events,
"It's been a gift, frankly, to them that capital markets have held up as well as they have," Matthew Fine, said by phone before earnings were released, as reported by Yahoo Finance. "Revenue has not deteriorated markedly and they have actually been able to build capital through this period."
Rustam Gilfanov is a famous IT businessman, a founder of a large IT company, and a partner of the LongeVC Fund.
Bitcoin and cryptocurrency in general guarantee some amazing profits if invested correctly.
In the currency trading business, many individuals make mistakes. Since most individuals join this profession with too much excitement, they forget about efficient strategies. Instead of controlling their investment and execution process, most individuals make poor choices for trading.
In today's digital world, more and more people are investing in cryptocurrencies. These digital tokens have exploded into popularity over the past few years, and have grown to the point that there are now nearly over 6,000 of them, according to Statista.
Generational wealth is a facet of wealth management that is often misunderstood. Labeled trust fund babies, rich kids, and lucky breaks, those who receive an inheritance from families are rare.
Social media has successfully made it to the mainstream consciousness of over half the global population. DataReportal's latest study shows that over 4.33 billion people worldwide are using some form of social networking site this year. That's why it's no wonder many tech companies are interested in investing or forming the next Facebook, Twitter, or YouTube to capture the hearts and minds of the general population.
Ease of access, freedom to choose in which to invest the money and lines of credit designed according to the needs of consumers, are some of the characteristics that have made consumer credit one of the most important financing products in the world’s market.
While researchers have suggested that individuals who base their self-worth on their financial success often feel lonely in everyday life, a newly published study by the University at Buffalo and Harvard Business School has taken initial steps to better understand why this link exists.