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Deutsche Bank turns surprise profit for third quarter

Published 27/10/2016

Deutsche Bank is in the throes of negotiating with the US Department of Justice over a 14 billion US dollar (£10.5 billion) settlement deal
Deutsche Bank is in the throes of negotiating with the US Department of Justice over a 14 billion US dollar (£10.5 billion) settlement deal

Deutsche Bank swung back into profit in the third quarter as it continues to grapple with a multi-billion dollar settlement charge by US authorities.

The German banking giant said net income hit 278 million euros (£247 million), a marked improvement on the 6.024 billion euro (£5.4 billion) loss seen in the third quarter of last year when it faced a one-off charge for the fallen value of its investment bank business.

Revenues edged up to 7.5 billion euros (£6.7 billion) in the third quarter, rising from 7.3 billion euros (£6.5 billion) over the same period in 2015.

Deutsche Bank is in the throes of negotiating with the US Department of Justice (DoJ) over a 14 billion US dollar (£10.5 billion) settlement deal handed to the bank following a probe into the lender's sale of mortgage-backed securities during the financial crisis.

Chief executive John Cryan said the settlement talks had overshadowed the positive steps it had made in turning around the business.

"We continued to make good progress on restructuring the bank. However, in the past several weeks these positive developments were overshadowed by the attention around our negotiations concerning the residential mortgage backed securities matter in the United States," he said.

"This had an unsettling effect. The bank is working hard on achieving a resolution of this issue as soon as possible."

Shares in the German lender have endured a rocky ride in recent months, amid fears that a large settlement could push the bank to raise more capital from investors.

The bank announced earlier this month that it would introduce a global hiring freeze following an announcement last year that it would slash 9,000 jobs by 2020 as part of a global efficiency drive.

Deutsche Bank employs more than 8,000 people in the UK.

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