Deutsche Bank Q3 profit beats market expectations High Street Networking

29 October 2004, 10:29 Deutsche Bank Q3 profit beats market expectations

Deutsche Bank AG , Germany's biggest bank, beat market forecasts with an 18 percent rise in third-quarter profits on Friday as lower bad debt charges and cost cuts outweighed a drop in revenues. Net profit in the three months to the end of September was 680 million euros ($865 million), up 3.6 percent from 656 million in the second quarter and 18 percent higher than the 576 million it made last year, Deutsche said in a statement. Seventeen analysts polled by had forecast Deutsche Bank's quarterly net profit in a range from 445 million to 685 million euros at an average 537 million euros. Trading income at its core Corporate and Investment Bank division fell 10 percent to 1.27 billion euros. Pre-tax profit fell 14 percent from the second quarter to 1.0 billion euros compared with a market consensus of 892 million. The Frankfurt-based bank, which makes most of its profits in investment banking in London and New York, continued to cut costs with quarterly expenses declining to 3.97 billion euros from 4.23 billion a year ago. Results were also helped by lower bad debt charges, which fell 46 percent from the second quarter and were 53 percent lower than a year ago at 83 million euros.
Overall revenues slid to 5.1 billion euros in the third quarter from 5.4 billion in the second quarter and from 6.1 billion in the first three months of 2004 as investment banking continued to suffer from poor market sentiment. Shares in Deutsche have provided little joy to investors this year, with the bank's value dropping by nearly 10 percent since January to around 32 billion euros, while Europe's banking sector <.SX7P> gained 4 percent. Deutsche stock trades at 11.2 times forecast 2004 profits, data shows, making it cheaper than stock in U.S. rivals such as Merrill Lynch and J.P. Morgan Chase or UBS of Switzerland. Deutsche Bank finance chief Clemens Boersig is scheduled to present the results to analysts in a conference call at 0700 GMT.////