Germany's biggest lender Deutsche Bank said Wednesday a major restructuring under its new chief executive was in full swing, as it confirmed second-quarter profits that beat analysts' previous expectations.
Net profits reached 401 million euros ($468 million) on the back of 6.6 billion euros in revenue, in line with preliminary figures the lender released earlier this month.
Analysts surveyed by data company Factset had earlier forecast profits of around 120 million euros. But the result was still 14 percent lower than last year's second-quarter earnings of 466 million euros.
“We accelerated the reshaping of our bank significantly and proved the resilience of our global business” between April and June, said CEO Christian Sewing, who took over from crisis firefighter John Cryan in April with promises of a far-reaching shakeup.
Deutsche highlighted some 239 million euros in costs for restructuring and employee severance — twice as much as the same quarter last year — as around 1,700 workers left. It added that it was “on track” to slash another 1,500 from its total headcount to dip below 93,000 by the end of the year, with a further ambition to shrink “well below” 90,000 by the end of 2019.
Meanwhile it finished integrating of subsidiary Postbank into its retail banking division in May.
And in its investment banking division, Deutsche reported “substantial” reductions in “leveraged” — or borrowing-fuelled — holdings of stocks and bonds, accounting for most of an 85-billion-euro reduction in such exposures across the bank.
There was slower progress on cutting costs, which fell 1.0 percent to 5.6 billion euros in adjusted terms in the second quarter. But executives said they remained committed to reducing outlays from last year's 23.8 billion euros to 23 billion in 2018.