Deutsche Bank with positive quarterly balance despite declining profits and ongoing IT problems at Postbank

Deutsche Bank with positive quarterly balance despite declining profits and ongoing IT problems at Postbank

According to a report from www.tagesschau.de, Deutsche Bank presented its quarterly balance sheet, which was positive despite a decline in profits. Although the group's earnings fell by eight percent to around one billion euros in the third quarter, the decline was smaller than analysts expected. The board is confident that it will exceed the strategic goals for 2025. However, the IT problems at the Postbank subsidiary continue to cost Deutsche Bank money. Additional costs of around 30 to 35 million euros are expected in the fourth quarter. In the third quarter the costs were less than ten million euros. Complaints from Postbank customers about IT changes led to a special representative monitoring Deutsche Bank as it resolved the problems.

In addition, the fund subsidiary DWS is also struggling with its own IT problems. The costs of converting the computer systems are expected to be higher than expected and significant IT setup costs are expected for at least another year. This will lead to additional transformation costs in 2024. It is also expected that the hoped-for savings will not materialize until later.

Despite these problems, Deutsche Bank achieved positive results overall. Reserves for loan losses were reduced by 100 million euros and the group's income increased by three percent to 7.1 billion euros. In particular, the private customer business and the corporate bank developed well, while the investment bank and the fund subsidiary DWS achieved less profit than in the previous year.

Due to the positive business results, Deutsche Bank plans to achieve revenues of around 29 billion euros, which offers the potential to increase distributions to shareholders. So far, the plan is to return over one billion euros to shareholders through dividends and share buybacks.

These developments also had a positive impact on the stock market, where Deutsche Bank shares led the German leading index DAX with a price gain of around six percent.

However, the IT problems at Postbank and DWS could continue to have a negative impact on the market and consumers. The additional costs and delays could affect the bank's image and encourage customers to switch to other banks. This could result in a loss of market share and possibly a decline in revenue.

Source: According to a report from www.tagesschau.de,