Deutsche Bank projects Q2 profit above consensus

Deutsche Bank AG on Monday said second-quarter profit and revenue would come in considerably above analysts’ forecasts, welcome news for the German bank’s new chief executive as he seeks to revive the lender’s fortunes.

The bank said it expects net income of around EUR400 million ($663.4 million) for the period, compared with a consensus estimate of EUR159 million, and pretax profit of about EUR700 million versus expectations of EUR321 million. It expects revenue of EUR6.6 billion against analysts’ forecasts of EUR6.4 billion.

Shares in the bank rose more than 6% in response to the unscheduled announcement. Deutsche Bank will report full second-quarter results on July 25.

The better-than-expected figures come as Chief Executive Christian Sewing tries to revive the German bank’s fortunes after three consecutive full-year losses, market-share declines and strategic upheaval.

However, while the projected figures are better than analysts had expected, they are similar to last year’s levels. Second-quarter net income last year came in at EUR466 million, while revenue was EUR6.6 billion.

Deutsche Bank’s announcement Monday shed some light on the bank’s efforts to reduce costs and in turn boost profit.

The lender said noninterest expenses are expected to be around EUR5.8 billion compared with consensus of EUR6 billion. It said restructuring actions have progressed rapidly in the second quarter with head count down by approximately 1,700 full-time equivalents to slightly above 95,400.

Deutsche Bank also said its Common Equity Tier 1 capital ratio, a measure of a bank’s capital strength, is expected to be around 13.6% compared with the average consensus estimate of 13.3%.

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