The German entity has assumed in its accounts an extraordinarily negative impact of 3,400 million related to the transformation plan with which it will cut 18,000 jobs in three years
The Deutsche Bank crisis continues to leave negative news for the bank. This Wednesday the German entity has presented results and its figures leave losses of 3,190 million euros in the second quarter of 2019, compared to the attributable net profit of 361 million in the same period of the previous year, after assuming an extraordinary negative impact of 3,400 million related to the transformation plan announced by the entity , which will cut 18,000 jobs in three years.
Without taking into account the impact of these extraordinary costs, Deutsche Bank would have accounted for a net profit of 231 million euros and a profit before tax of 441 million, according to the German bank.
“We have already taken important steps to implement our strategy to transform Deutsche Bank. These are reflected in our results,” said Christian Sewing, CEO of Deutsche Bank, who stressed that, excluding such transformation costs, “the bank would be profitable.”.
The charge of 3,400 million assumed by Deutsche Bank in relation to its strategic transformation includes 2,000 million euros in adjustments in the value of deferred tax assets (DTA), in addition to 1,000 million euros of impairment of goodwill due to the reduction of prospects of the business plan and another 351 million due to deterioration in the value of software and provisions for service contracts.
The turnover of Deutsche Bank between April and June 2019 reached 6.203 million euros, 5.9% below the revenues recorded a year earlier, down from 17.7% in corporate banking and of investment and 2.2% in the private and commercial banking division, while the asset management business grew 6%.
In the second quarter of the year, the provisions for credit risk of the German bank totaled 161 million euros, 70% more than in the same period of 2018.
Thus, in the first half of the year, Deutsche Bank has accounted for losses of 3,012 million euros, in contrast to the net profit of 481 million in the first six months of 2018, while the entity’s turnover decreased by 7.5%, up to 12,554 million.
On June 30, the basic capital ratio CET 1 of Deutsche Bank was 13.4%, three tenths less than a year earlier.
The workforce of Deutsche Bank amounted to 90,866 troops, which means a reduction of 4,563 employees in one year.
On July 7, Deutsche Bank announced its plans to improve the profitability of the entity with “the restart of Deutsche Bank”, including the cut of 18,000 jobs in three years.
