FRANKFURT, Germany (AP) — Deutsche Bank’s net profit rebounded to 466 million euros ($545 million) in the second quarter from a mere 20 million euros a year earlier as the bank presses on with a difficult long-term restructuring, the company said Thursday.
CEO John Cryan said the bank was making progress in cutting costs and increasing profitability. But he added that the performance “falls short of our longer-term aspirations.”
The bank incurred lower costs for restructuring and litigation, and attracted 9 billion euros ($10.6 billion) in investment into its retail banking and asset management businesses. Legal expenses fell to 26 million euros from 120 million in the year-earlier quarter. Its headcount continued to shrink as it cut costs and was down by 4,600 full-time jobs from a year ago, to 96,700.
The net profit figure fell short of analysts’ expectations for 571 million euros as compiled by financial information provider FactSet.
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Cryan said in a statement that the results “give a good summary of where we stand today.”
“Profitability is significantly better than a year ago,” he said. “We made good progress in bringing costs down and continued to attract net money inflows from clients.”
Yet “despite the significant improvement, this level of profitability falls short of our longer term aspirations.”
Deutsche Bank has struggled with weak earnings and high costs for legal fines and settlements of past misconduct. Under Cryan, who became co-CEO in 2015 and sole boss in May 2016, the bank has been leaving less profitable regions and lines of business, cutting costs, and seeking to resolve remaining legal cases. In December, the bank cleared up one of its largest outstanding cases by agreeing to a $7.2 billion settlement with the U.S. Justice Department over its handling of bonds backed by house mortgages.
In April, the bank raised 8 billion euros in new capital through a share offering.
Deutsche Bank is Germany’s largest, and it is also on the list of 30 global systemically important banks as compiled by the Basel, Switzerland-based Financial Stability Board. Those banks are required to hold thicker financial cushions against loss because troubles at those institutions could affect the financial system as a whole.