Deutsche Bank profit up 6.4%, exceeding target

Frankfurt: Deutsche Bank AG, Germany's largest bank, said second-quarter profit rose 6.4 per cent, beating analysts' estimates, as gains in retail and transaction banking helped offset a decline in sales and trading.

Deutsche Bank rose as much as 3.6 per cent in Frankfurt trading after saying net income increased to 1.16 billion euros (Dh5.6 billion), surpassing the 1.05 billion-euro median estimate of analysts surveyed by Bloomberg.

Sales and trading at the investment bank, run by Anshu Jain, fell 15 per cent from a year earlier and 42 per cent from the first quarter, tracking declines at competitors including Credit Suisse Group AG and Goldman Sachs Group. The so-called stable businesses of global transaction banking, consumer banking and asset and wealth management posted their highest combined pretax profit in two years.

"The stable businesses made very pleasant progress in the second quarter," said Manfred Jakob, an analyst at SEB AG in Frankfurt. "The slump in trading is largely due to the euro crisis."

Deutsche Bank was up 1.9 per cent to 51.34 euros by 9.18am in Frankfurt. UBS AG, Switzerland's biggest bank, rose as much as 7.6 per cent in Swiss trading after reporting a third consecutive quarterly profit, beating analysts' estimates on higher-than-expected trading revenue.

Earnings from Deutsche Bank's retail unit rose more than four-fold to 233 million euros, the most since the collapse of Lehman Brothers Holdings in 2008, helped by mortgage lending and a decline in loan defaults.

Pretax profit from transaction banking more than doubled to 478 million euros.

Positive outlook