Fixed-income traders at Deutsche Bank helped push its investment bank to an 11% gain in the second quarter, even as the German lender saw a sharp drop in transaction fees.
The German lender recorded 2.6 billion euros in revenue at its investment bank in the three months to the end of June, which was above analysts’ expectations and up 11%. Fixed income trading revenue of €2.4 billion increased 32% over the period and exceeded market expectations.
The bank said revenue from its rates, foreign exchange and emerging markets trading units more than doubled from a year earlier, offsetting the decline in credit trading.
However, Deutsche Bank only made 21 million euros in its core debt issuance business, a 95% decline which it said was due to losses in its bond finance unit. of leverage. Its M&A fees swelled by 50% to 166 million euros, but this remains below market expectations for these fees.
LILYDeutsche Bank’s Fixed Income Trading Unit Boosts Earnings
After the trading boom in 2021, when banks hauled a record $130 billion, according to data provider Dealogic, activity slowed as market volatility froze equity trading and macroeconomic issues such as rising inflation have spurred the appetite for mergers and acquisitions.
Banks such as Goldman Sachs and Morgan Stanley have cut salaries at their investment banks to reflect softer market conditions. However, Deutsche Bank spent €1.2 billion on clearing in the first six months of 2022, a 13% increase on the previous year.
“With the best half-year earnings since 2011, we have proven – once again – that we can deliver growth and rising earnings in a challenging environment,” chief executive Christian Sewing said in a statement.
Overall, Deutsche Bank posted a profit of 1.2 billion euros, an increase of 46% compared to the same period in 2021. That was higher than analysts’ forecast of 950 million euros.
To contact the author of this story with comments or news, email Paul Clarke