Deutsche Bank Boosts Share Price with Increased Investor Cash Inflow

Deutsche Bank's shares saw a significant increase of almost 7% on Wednesday following the announcement that its strong earnings would result in a higher cash payout to shareholders over the next two years. The largest bank in Germany stated in its third-quarter report that it was poised to achieve annual revenue of €29 billion ($31 billion) in 2023, marking its highest in seven years. Additionally, the report highlighted the potential to release approximately €3 billion ($3.2 billion) in capital between now and 2025.

The bank anticipates repurchasing a greater amount of its shares in the following year, a move that typically boosts a company's stock price. Deutsche Bank (DB) recorded a pretax profit of €1.7 billion ($1.8 billion) in the three months ending September, marking a 7% increase compared to the corresponding period in the previous year.

Net revenue for the third quarter increased by 3% compared to the previous year, reaching €7.1 billion ($7.5 billion), primarily due to robust growth in the private and corporate banking sectors. Christian Sewing, the CEO of the bank, stated in a press release that these results signify a consistent and vigorous momentum in business expansion, while also maintaining cost discipline.

"This gives us scope to… further improve returns, and increase and accelerate distributions to our shareholders," he added.

FILE PHOTO: The logo of Deutsche Bank is seen in Brussels, Belgium December 6, 2022. REUTERS/Yves Herman/File Photo

Yves Herman/Reuters

US judge greenlights $75 million settlement between Deutsche Bank and Epstein accusers. However, Deutsche Bank's investment banking division experienced a 4% decline in revenues, a trend witnessed across the industry as deal activity diminished due to increased borrowing costs stemming from interest rate hikes.

The bank's recent progress signals a significant turnaround after enduring scandals, extensive job cuts, and hefty penalties that have adversely affected its reputation and stock price. Although its shares have nearly doubled since reaching an all-time low in March 2020, they remain considerably down by 67% over the past ten years.

In July, the US Federal Reserve imposed a $186 million fine on the bank for its failure to rectify unsafe and unsound practices that had been identified several years ago. The Fed's investigation determined that Deutsche Bank had not made sufficient strides in enhancing its anti-money laundering measures since 2018, among other shortcomings.