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The German lender also announced plans to increase share buybacks and dividends by 50%, returning a total of €1.6 billion to shareholders.
Deutsche said it is planning an additional share buyback of 675 million euros, which it aims to complete in the first half of the year. This follows €450 million of buybacks in 2023. It also plans to recommend €900 million in dividends to shareholders by 2023 at its Annual General Meeting in May.
For the year as a whole, the bank recorded 4.2 billion euros of net income attributable to shareholders, exceeding analysts’ expectations of 3.685 billion euros.
“The pre-tax profit of 5.7 billion is maximum, we grew year after year despite some items that this year generated some noise, but what is really exciting is the momentum we see in the business,” said James von, CFO of the Deutsche Bank. Moltke told CNBC on Thursday.
“We had 10% year-on-year growth in our investment bank in the fourth quarter and, certainly, in a year that was still recovering the very good results of 2021 and 22, that is, 9% less for the whole year, but “I see momentum, especially as we enter 2024, in origination advisory and very strong, I think consistent, performance in our FIC (fixed income and foreign exchange) franchise.”
As part of a €2.5 billion operational efficiency program, Deutsche Bank said it expects to cut 3,500 jobs, mainly in “non-customer-facing areas.”
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By the end of 2023, the savings realized or expected thanks to the measures completed under the efficiency program increased to 1.3 billion euros, the bank estimated. The goal of the program is to reduce the quarterly run rate of adjusted costs to €5 billion, with total costs falling to around €20 billion in 2025.
In a statement on Thursday, Sewing said the bank’s performance in 2023 “underscores the strength of our Global Hausbank strategy as we help our clients navigate an uncertain environment.”
“We have achieved our highest pre-tax profit in 16 years, delivered growth well above target and have maintained our focus on cost discipline while investing in key areas,” Sewing said.
“Our strong capital generation allows us to accelerate distributions to shareholders. This gives us strong confidence that we will meet our 2025 targets.”
Other fourth quarter highlights included:
- Net income grew 5% year-on-year to €6.7 billion, bringing the annual total to €28.9 billion.
- Net inflows of 18 billion euros between the Private Banking and Asset Management divisions.
- The provision for bad debts was 488 million euros, compared to 351 million in the same period of 2022.
- The common equity tier one (CET1) ratio, a measure of bank solvency, was 13.7% at the end of 2023, compared to 13.4% at the end of the previous year.
Amid concerns about bank profitability and reports that the German government is considering selling some of its company’s stakes, including its 15% stake in Commerzbank, Deutsche has become the subject of merger speculation in recent months. .
However, CEO Christian Sewing told CNBC at the World Economic Forum in Davos, Switzerland, that acquisitions were not a “priority” for Germany’s largest bank.
Correction: This article has been updated to reflect that Deutsche Bank’s results were released on Thursday.