Bond Market News

German lender Deutsche Bank reported a 46% YoY growth in net profits to €1.2bn ($1.2bn) for the second quarter. Its net revenues increased 7% to €6.6bn ($6.7bn). Deutsche attributed the growth to a normalizing interest rate environment, growth in business volumes, and higher fee income. In terms of business segments, its Corporate Bank segment reported revenue growth of 26% YoY to €1.6bn ($1.6bn), the highest since the corporate bank’s formation in 2019. The Investment Bank division generated net revenues of €2.6bn ($2.6bn), up 11% YoY, driven by Fixed Income & Currencies (FIC) revenues rising 32% YoY to €2.4bn ($2.4bn). Its Private Bank revenue grew 7% YoY to €2.2bn ($2.2bn) while Asset Management (AM) net revenues gained 5% YoY to €656mn primarily due to a 6% rise in management fees to €619mn ($632mn). ESG-related financing and investments volumes were €14bn ($14.2bn). Provision for credit losses came in at €233mn ($236mn), up from €75mn ($76mn) last year, mainly due to provisioning of €52mn ($53mn) for Stage 1 and 2 loans. Deutsche further reduced its Russian credit exposures during the second quarter, with additional contingent risk dropping by 42% during the quarter to €600mn ($608mn). The bank has given revenue guidance of €26-27bn ($26.3-27.4bn) for the full year of 2022. The bank’s CET1 ratio stood at 13% down 20bp YoY, sitting just above the regulatory requirement of 12.5%.

Deutsche Bank’s 4.789% perps callable in 2025  are trading higher at 83.7, up by 0.22 points, yielding 13.55%.