A debt trading windfall helped Deutsche Bank trump market forecasts to swing to a first quarter profit of €1.2 billion (Dh5.8bn), masking the erosion of its key businesses by the economic crisis.
Deutsche Bank reported a loss in its wealth management arm and a dip in profits at its retail bank while chalking up €1.5bn in writedowns.
"Looking forward, we see continued challenges, but also opportunities," Chief Executive Josef Ackermann said in a statement. Germany's flagship financier was lifted out of slump with revenue from sales and trading of debt, which rose almost three-fold to €3.8bn.
This helped the bank reach a net profit of €1.2bn in the first three months of the year, compared to a loss of €141 million a year earlier, beating all the analysts' forecasts in a Reuters poll.
However, some analysts and traders were sceptical that it would get the same windfall later in the year.
"It is an impressive result," said fund manager Dieter Ewald from Frankfurt Trust, which owns shares in Deutsche. "Sales and trading are the main reason. The question is if this comes again. The first quarter is traditionally the strongest."
Kian Abouhossein, a JPMorgan analyst, cheered the news but also flagged Deutsche Bank's dependence on debt trading. "The results were purely driven by fixed income and CBS (corporate banking and securities)," Abouhossein said. "Other divisions look below expectations, for example asset and wealth management, retail and transaction banking."
The sudden reemergence of investment banking – which has been Deutsche Bank's golden goose under Ackermann's watch -- comes despite continuing market ructions.
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