Deutsche Bank returns to quarterly profit as lawsuit provisions cut

By Tom Sims and Matthias Inverardi

FRANKFURT (Reuters) -Deutsche Bank bounced back to profit in the third quarter, as it reduced reserves set aside for investor lawsuits over its Postbank division while its global investment bank fired on all cylinders.

A 15-quarter profit streak at Germany's largest lender was interrupted in the second quarter after it made a large provision for the lawsuits. But Deutsche has since settled some of the suits and cut provisions by 440 million euros ($475 million), helping lift profit.

The bank also said it was applying for a share buyback, a move that was on hold because of its issues with Postbank, though provisions for credit losses were double those a year earlier.

Net profit attributable to shareholders came in at 1.461 billion euros in the quarter, 42% more than a year earlier and in line with expectations. It logged a loss of 143 million euros in the second quarter.

"In these three months, we made important progress in putting legacy litigation matters behind us, while also producing a record third-quarter profit in our operating business," Deutsche Bank CEO Christian Sewing said.

Deutsche Bank is one of several big European banks publishing its quarterly report card this week and next. The sector is expected to show continued profitability, with robust investment banking activity offsetting squeezes on margins and weak demand for loans among consumers and businesses.

In recent weeks, news that Italy's UniCredit was pushing for a possible tie-up with Deutsche Bank's smaller domestic rival, Commerzbank (ETR:CBKG ), has dominated headlines and invited speculation that Deutsche may jump into the fray with mergers and acquisitions.



But Deutsche officials have repeatedly played down such notions, saying they are focused on their own strategy.

($1 = 0.9257 euros)

Source: Investing.com