FRANKFURT (Reuters) -Deutsche Bank posted on Wednesday a 27% fall in second-quarter profit as investment banking revenues slumped, but the drop was lower than expected as higher interest rates fuelled gains at the retail division.
Net profit attributable to shareholders was 763 million euros ($843.04 million), down from 1.046 billion euros a year earlier but better than analyst expectations for profit of around 571 million euros.
The German lender downgraded its outlook for the investment bank, saying it now expected revenues to be slightly lower in 2023, compared to a previous forecast for flat revenue.
Deutsche also faced a rise in non-operating costs in the quarter, partly as a result of higher litigation and severance charges.
The figures underscore broader trends in global banking, with investment banks struggling as deals are paused, while higher interest rates are a boon to other divisions.
Deutsche’s retail division became its biggest revenue generator during the quarter. Analysts expect the retail unit will also overtake the investment bank as the main revenue driver for the full year, overturning the investment bank’s pole position over the previous three years.
Despite the profit drop, the earnings marked the bank’s 12th consecutive quarter of profit, a noteable streak in the black after years of losses.
($1 = 0.9051 euros)
(Reporting by Tom Sims and Matthias Inverardi; Editing by Friederike Heine and Jamie Freed)
