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The Euromoney 25

Deutsche Bank: Growing revenues as well as cutting costs

The transformation plan appears to be working and as the investment bank regains market share, Deutsche looks better set for the coming consolidation.

James von Moltke, CFO of Deutsche Bank AG, addresses the media during the bank's annual news conference in Frankfurt
James von Moltke, CFO of Deutsche Bank AG

It has been a good year for Deutsche Bank, as customers and investors see growing evidence of delivery on the transformation plan set out in July 2019.

Back then, Deutsche had first promised to do a much better job on costs, which have now been inching down for 11 consecutive quarters, although earnings headed the same way at the start. But the bank also grew revenues in 2020, delivering positive operating leverage for four quarters in a row.

The share price is up almost 29% for the year to mid November. Moody’s has the bank on a positive ratings outlook thanks to improved earnings, strong capital and liquidity and low loan losses.

The investment bank has performed much better than expected. For the third quarter of 2020 it brought in revenues 43% ahead of the same quarter in 2019.

Market share

All banks active in the capital markets benefited from higher volumes, greater volatility and wider bid-offer spreads, especially in rates and foreign exchange, which are among the areas Deutsche chose to focus on back in 2019.

But

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