Deutsche Bank, Germany's biggest bank, reported second-quarter net income of $1.55 billion (EUR 1.2 billion) versus $1.42 billion in second-quarter 2009, the Frankfurt-based company announced Tuesday, July 27. Diluted earnings per share were $2.27 versus $2.12 in the second quarter of 2009.
Overall quarterly revenue dropped from April to June during the European debt crisis to $9.3 billion from $10.3 billion a year ago. That was offset by fewer set-asides for bad loans in second-quarter 2009. Pre-tax return on average active equity was 15%; excluding significant gains and charges, it was 13%.
The report was in line with analysts' forecast for net income of EUR $1.5 billion, according to European equity analyst Matthew Clark of Keefe, Bruyette & Woods' London office.
Clark called Deutsche Bank's performance "lackluster" in a note written right after the earnings report was released. Clark commented that strength in global transaction banking and private and business clients was offset by unexpected write-downs.
"Investment bank revenue trends were below consensus, but in line with peers on an underlying basis," Clark said, noting that Deutsche Bank's 13% return on net asset value, while not its finest quarter, should keep investors interested in the stock.
