Deutsche Bank says Q2 profit hurt by higher taxes, lower revenue, market volatility
BERLIN (AP) -- Deutsche Bank AG posted a 29 percent drop in second-quarter net profit Tuesday, hit by higher taxes, declining revenue and political instability affecting financial markets.
Germany's largest bank said its net profit in the April-June period fell to 238 million euros ($320 million), down from 335 million euros a year earlier.
The Frankfurt-based bank said the results came from 7.86 billion euros in quarterly revenue, a 4 percent decline from 8.215 billion euros from a year ago.
However, co-chief executives Juergen Fitschen and Anshu Jain described the quarter as having a "strong underlying performance" with pre-tax profits up 16 percent from a year ago and core businesses such as corporate banking and securities delivering strong revenues and growing profits.
They cautioned in a joint statement that the environment is "complex" and that "emerging geopolitical events in Ukraine and the Middle East may impact financial markets and our clients, and we continue to adapt to a fast changing regulatory framework."
The bank said that quarterly adjustments and non-tax deductible expenses caused it to pay a 73 percent tax ratio for the quarter, up from a 50 percent ratio in the comparable period last year.
A year ago, the bank's second-quarter net profit also fell significantly, because of lawsuit expenses and higher taxes. Deutsche Bank has been facing a number of legal challenges, including lawsuits related to U.S. mortgage bonds and a scandal over rigging of a key interest rate benchmark by several banks.
The bank said it set aside 470 million euros to cover litigation-related charges in this year's second quarter, 160 million euros less than a year earlier.
Deutsche Bank shares were barely changed in late-morning Frankfurt trading, up 0.1 percent on the day at 26.74 euros.