Profit of Deutsche Bank dropped in Q2 2014

Deutsche BankDeutsche Bank AG announced profit decrease by 29% yoy in Q2 2014, caused by lower non-interest profits and higher taxation. The net profit of the lender in the three months to the end of June fell to 237 million EUR compared to 334 million EUR for the same period last year. Remained below the level expected by experts polled by Bloomberg for a profit of 470 million EUR. The global investment banks try to cut costs in order to push up profits amid tighter regulations and record-low interest rates of central banks tightened in recent years, proceeds from loans and trading bonds.
“Nobody expects a good performance against the very difficult revenue environment”, said before a statement Stephan Bongard, an analyst at Independent Research GmbH. “The company needs to show investors that the trend in trade debt will change in the coming quarters. Their patience is not infinite”, he added.
The revenues of Deutsche Bank from trading and foreign currency debt remained unchanged at 1.83 billion EUR in the third quarter compared with a year earlier. The legal costs of the company, which amounted to 3 billion last year, hampering efforts to increase returns for investors. Earlier in July the bank was suspected by US authorities for cooperation with the countries against which Washington imposed economic sanctions. The US authorities suspect German lender making deals with countries such as Iran, Sudan and Syria, bypassing Washington imposed economic sanctions. Financial institution acknowledge receipt of the request by the US authorities regarding their dollar transactions and expressed its intention to cooperate fully with the investigating authorities.
The ratio of Tier I capitalof the German lender – one of the key measures of financial stability, was 11.5% at the end of June. In March it was reported at 9.5%.
The shares of Deutsche Bank got cheaper by 19% since the beginning of 2014. Shares of the company closed trading on the Frankfurt stock exchange on Monday retreat 0.2% to 26.68 EUR per share.

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