Deutsche Bank AG (DB) - Get Deutsche Bank AG Report shares fell the most in four months Thursday after Germany's largest lender posted weaker-than-expected second quarter revenue amid what it called "muted" global capital markets and lowered its full-year guidance.
Deutsche Bank said net income for the three months ending in June rose to €466 million ($546 million), well ahead of the street consensus of €273 million while pre-tax profits surged to €822 million against a €547 million estimate. Second quarter revenues, however, slowed to €6.6 billion, down 10% from the same period last year and missing the consensus forecast of €7.08 billion, a trend the bank sees extending into the second half of the year.
"Revenues of our operating businesses are expected to be lower than last year," the bank said. "This reflects our expectation that market volatility and related client activity remain muted, whereas our macro outlook remains broadly positive."
Deutsche Bank shares were marked 2.65% lower at €16.20 each in the opening 30 minutes of trading in Frankfurt, the biggest single-session decline since March 3, extending their year-to-date decline to 6.25%.
The stock has fallen 15% since the bank said it will raise €8.5 billion in new capital and plan the partial sale of its asset management business as it attempts to strengthen its balance sheet following a multi-billion settlement with U.S. legal authorities.
"Our second-quarter results give a good summary of where we stand today. Profitability is significantly better than a year ago. We made good progress in bringing costs down and continued to attract net money inflows from clients," said CEO John Cryan. "Despite the significant improvement, this level of profitability falls short of our longer term aspirations.
"Revenues were not as universally strong as we would have liked, in large measure because of muted client activity in many of the capital markets," he added. "As we modernise our bank we are turning our focus onto building profitable growth."