Shares in the lender, which operates in multiple regions, rose yesterday. Within the private bank, revenues and business volumes rose.

Deutsche Bank yesterday said that it had reported its highest full-year net profit since 2011, standing at €3.4 billion ($3.78 billion) and a rise of more than three times from the previous year, vindicating a lender that has had to restructure and cut risk exposures.

The Frankfurt-listed group, which operates in multiple regions, said that its fourth-quarter earnings showed pre-tax profit of €82 million. Net profit for the full year rose more than four-fold to €2.5 billion.

Private bank net revenues were €8.2 billion in 2021, up by 1 per cent on a year before, or up 2 per cent if adjusted for forgone revenues resulting from the German Federal Court of Justice (BGH) April 2021 ruling on customer consent for pricing changes on current accounts and the non-recurrence of a negative prior-year impact from the sale of Postbank Systems AG.

The private bank generated business volume growth of €45 billion in 2021, 50 per cent above its target threshold, including €23 billion in net inflows into investment products and €15 billion in net new client loans.

In the fourth quarter, private bank net revenues were €2.0 billion, up 4 per cent. Revenues in Private Bank Germany rose 8 per cent, or were down 2 per cent if adjusted for the prior year impact of Postbank Systems and the BGH ruling.

Revenues in the international private bank were down 2 per cent, or up 6 per cent if adjusted for the non-recurrence of prior-year revenues relating to Sal Oppenheim workout activities. (Sal Oppenheim is a German wealth manager which was integrated into the Deutsche business in 2017.)  

Shares in Deutsche Bank were up 4.8 per cent in late-afternoon trade in Frankfurt.

“The IPB delivered another solid performance for the bank during the fourth quarter, while continuing to successfully execute on our strategy,” Claudio de Sanctis, head of the IPB and chief executivie, EMEA, said.

The IPB business unit recorded positive net inflows in assets under management for the eighth straight quarter, bringing full year inflows to €17.3 billion.

In Q4, the IPB launched the Bank for Entrepreneurs in Spain following a rollout in Italy earlier in the year. More than 150 relationship and investment managers have joined client-facing teams.
 

Other group results
The bank as a whole had a Common Equity Tier 1 capital ratio of 13.2 per cent at the end of 2021.

Earlier this week, the bank said it was providing total capital distributions to shareholders of about €700 million. Deutsche Bank said this represents the first step towards its previously-announced commitment to gradually return €5 billion of capital to shareholders.

“All four core businesses performed at or ahead of our plan, and our reduction of legacy assets progressed faster than expected. We are delighted to be resuming capital distributions to our shareholders as we promised in the summer of 2019. Our transformation progress and financial performance in 2021 provided a strong step-off point to achieve our target of a return on tangible equity of 8 per cent in 2022,” chief executive Christian Sewing said.

The bank has been restructuring, repairing its balance sheet and reducing risk-weighted assets (RWAs). The Capital Release Unit – set up as part of the process – “delivered another year of significant portfolio reduction while further reducing the cost of de-leveraging in 2021,” it said.

At the end of the year RWAs were cut to €28 billion from €34 billion at the end of 2020, ahead of Deutsche Bank’s end-2022 target of €32 billion.

Investment bank net revenues rose 4 per cent to €9.6 billion in 2021 while corporate bank revenues were flat.

Asset management net revenues grew 21 per cent to €2.7 billion in 2021, reflecting growth in both management fees and performance fees, it added.