Of Special Interest

Filters

[x] [x]

3rd February 2012

Acquisitions aid Deutsche Bank bottom line

Deutsche Bank Q4 net attributable was €147m (£123m $194m ¥14.8bn Y1,222m) and full year of €4,132m (£3,451m $5,444m ¥415.7bn Y34,346m). The results were DOWN 76% and UP 78% on the year previous figures. The Q4 result was heavily influenced by new loan loss provisions and a significant fall in FICC business. There was also a move into loss from Equity method investments.


Income growth seen below is almost entirely due to acquisitions. At various points in the last two years the bank has acquired Deutsche Postbank (majority share so consolidated), Sal Oppenheim and parts of ABN Amro Netherlands. The increase in loan loss provisions was almost entirely down to Postbank. A problem for a number of German banks, including Postbank, is that assets hastily reclassified under the IAS 39 ('fair value fudge') rule to avoid writedowns during the banking crisis are now having to be written down. Though IAS 39 fair value writedown avoidance was open to all banks using IFRS accounting standards German banks were amongst the heaviest users of this rule.


Integration and litigation expenses were blamed for the 11% increase in expenses. There were a number of specific charges also. The bank's expense reduction program is reported to have saved €550m, against this was the one off implementation cost for introducing the savings was €150m). This compares with a planned €500m saving and €190m introduction cost.


CT1 to Basel 2.5 was 9.5% at year end.


Income Summary 2011-Q4 2010-Q4 2011-FY 2010-FY
€m €m €m €m
Net interest income 4,511 4,521 17,445 15,583
Provision for credit losses 540 406 1,839 1,274
______________________________________
Net interest income after provision 3,971 4,115 15,606 14,309

Commissions and fee income 2,610 3,055 11,544 10,669
Fair value change on financial assets 118 -169 3,058 3,354
Change on financial assets available for sale -142 15 123 201
Net income from equity method investments -356 32 -264 -2,004
Other income 158 -27 1,322 764
______________________________________
Total noninterest income 2,388 2,906 15,783 12,984

Compensation and benefits 2,798 3,077 13,135 12,671
General and administrative expenses 3,740 3,055 12,657 10,133
Policyholder benefits and claims 172 182 207 485
Impairment of intangible assets – – – 29
______________________________________
Total noninterest expenses 6,710 6,314 25,999 23,318

Income (loss) before income taxes -351 707 5,390 3,975
Income tax expense (benefit) -537 102 1,064 1,645
_____________________________________
Net income (loss) 186 605 4,326 2,330
Noncontrolling interests 39 4 194 20
____________________________________
Attributable to Deutsche Bank shareholders 147 601 4,132 2,310