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Deutsche Bank profits aided by resurgent private bank

The German bank’s strong third-quarter earnings are a partial result of forming a new international private bank division two years ago, honing it and continuing to invest in the strategy.

The financial district with the headquarters of Germany's largest business bank, Deutsche Bank , is photographed on early evening in Frankfurt
Photo: Reuters

Like many other European lenders, Deutsche has had a good run of late. It just posted its best third-quarter profits since 2006, with higher interest rates pushing pre-tax earnings to €1.6 billion ($1.58 billion), handily beating analyst expectations of €1.3 billion.

Chief financial officer James von Moltke called 2022 a “landmark year”. Pre-tax profits rose 46% year-on-year in the first nine months, to €4.8 billion, with post-tax return on tangible equity hitting 8.1% – against 4.8% a year ago and in line with its full-year target.

Claudio de Sanctis, Deutsche Bank

All four main divisions played their part, but wealth management – and specifically Deutsche’s international private bank (IPB), a division formed in mid-2020 – has had something of a breakout year.

Global head of IPB and EMEA chief executive Claudio de Sanctis tells Euromoney the division played a key role in the private bank’s near tripling of third-quarter pre-tax profits to €447 million and in helping to attract net new business volumes of €12 billion in the July-September quarter and €36 billion in the first nine months – both record numbers.

He points to the outsized role played by Europe, describing incremental revenue growth in Italy and Spain as “staggering” and tipping profits in those markets plus Germany to generate “double-digit growth” in the full-year 2022.