Deutsche Bank reports profit before tax of € 1.5 billion, its highest second-quarter profit since 2011

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Deutsche Bank (XETRA: DBGn.DB / NYSE: DB) today announced its highest second-quarter and half-year post-tax profits since 2011. Profit before tax was € 1.5 billion for the second quarter of 2022, up 33% year on year, while post-tax profit was up 46% to € 1.2 billion.

Post-tax return on average tangible shareholders’ equity (RoTE)1 was 7.9%, up from 5.5% in the prior year quarter. Post-tax return on average shareholders’ equity (RoE) was 7.1% in the quarter, up from 4.9% in the prior year quarter.

The cost/income ratio improved to 73%, from 80% in the second quarter of 2021. The effective tax rate of 22% for the quarter benefited from a change in the geographical mix of income.

For the first six months, profit before tax was € 3.2 billion, up 16%, and post-tax profit was up 31% to € 2.4 billion. Profit attributable to Deutsche Bank shareholders was up 32% to € 2.1 billion. Post-tax RoTE1 was 8.0%, up from 6.5% in the first six months of 2021, and post-tax RoE was 7.2%, up from 5.8%.

The cost/income ratio improved to 73%, from 78% in the prior year period. Results for the first six months of 2022 included bank levies of € 736 million, up € 189 million, or 34%, over the prior year period. The effective tax rate for the first six months was 24%.

Deutsche Bank earnings

2022 targets updated, 2025 targets reaffirmed
Deutsche Bank reaffirms 2022 revenue guidance of € 26-27 billion despite the deterioration in the macro-economic environment seen in the second quarter and expectations for a more challenging second half of the year.

The bank remains committed to continuing its cost reduction efforts and will continue to execute on its 2022 plan. However, the bank also recognises increasing cost pressures from factors outside its control including higher-thanexpected bank levies, inflation, unforeseen costs related to the war in Ukraine, and litigation matters.

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The bank also made the decision not to cap strategic investments in its control environment, staff, and technology to drive growth and
efficiency, which are important for its long-term strategic direction as outlined in the Investor Deep Dive of March 10, 2022. In the light of both revenue and cost developments, Deutsche Bank has updated its 2022 targets as follows:

• The bank continues to target a post-tax RoTE1 of 8% (Group) and above 9% (Core Bank) for the year 2022, while recognising that the current operating environment makes delivery on these targets more challenging
• The bank’s guidance is now for a cost/income ratio in the mid- to low-70s percent for 2022 Deutsche Bank confirms all other 2022 financial targets including a CET1 capital ratio of above 12.5% and a leverage ratio of around 4.5%.

The bank reaffirms the goals of its strategy of sustainable growth through 2025. For 2025, the bank targets compound annual revenue growth of 3.5-4.5%; posttax RoTE1 of greater than 10%, and a cost/income ratio of below 62.5%. The bank also reaffirms its aim for cumulative capital distributions of around € 8 billion in respect of the years 2021-2025.

James von Moltke, Chief Financial Officer, said: “Based on the resilience we have demonstrated in the first half, we reaffirm our 2022 revenue guidance, which we raised earlier this year. We continue to work towards our eight percent return on tangible equity target. At the same time, we face cost pressures in a more difficult environment than expected and continue to invest in the long-term strength of our
platform. We remain fully committed to our sustainable growth strategy and to all our financial targets for 2025.