CashNews.co
Germany’s biggest lender Deutsche Bank on Wednesday reported a sharp jump in third-quarter profits, boosted by the settlement of investor lawsuits related to its Postbank division.
Net profits came in at 1.46 billion euros ($1.58 billion), up 42 percent from a year earlier. Analysts surveyed by financial data firm FactSet had forecast a figure of 1.32 billion euros.
Profits were lifted by the settlement this year of lawsuits with some former shareholders of Postbank, who took legal action against Deutsche Bank alleging that a 2010 takeover shortchanged them.
This allowed Deutsche Bank to cut provisions that had been set aside related to the cases.
“We made important progress in putting legacy litigation matters behind us, while also producing a record third-quarter profit in our operating business,” said Deutsche Bank CEO Christian Sewing.
In the second quarter, Deutsche Bank had booked a loss of 143 million euros, dragged down by the huge provision it had to set aside related to the Postbank saga.
Following Wednesday’s results, Sewing said Deutsche Bank was now going to apply for further share buybacks.
In the July-September period, revenues rose by five percent year-on-year to 7.5 billion euros, driven by an 11 percent jump in the investment banking division, and 11 percent in asset management.
This offset falls in corporate banking and retail banking, where the positive impact of higher eurozone interest rates is fading.
Deutsche Bank has undergone major restructuring in recent years, seeking to rely more on retail and corporate banking after an aggressive shift in the early 2000s into investment banking drew it into multiple scandals.
The strategy has largely paid off, with the bank reaping greater profits.