FRANKFURT, Germany (AP) — Deutsche Bank saw its net profit increase 6%, to 329 million euros ($381 million), in the third quarter despite a sharp increase in restructuring costs. The bottom line at Germany's largest bank benefited from fewer loans going bad as the economy rebounds from the coronavirus pandemic and credit support from governments and the European Central Bank.
The bank said Wednesday that its yearslong effort to streamline its business was on track and that 90% of the costs of its transformation were already accounted for.
Deutsche Bank had to set aside only 117 million euros ($136 million) for losses on loans that aren't being repaid, down 57% from the same quarter a year ago. Since then, some of the worst pandemic restrictions have eased, while governments have extended credit guarantees and other support for businesses and the European Central Bank has taken steps to keep market interest rates low, reducing stress on borrowers.
The bank took a 583 million euro ($676 million) loss for its restructuring, more than five times the total from the same quarter a year ago, largely related to a contract settlement and software impairments relating to its migration to cloud computing.
Deutsche Bank is going through an extended restructuring aimed at cutting employee numbers and costs and withdrawing from less profitable business areas to achieve steadier profits after a period of losses and repeated troubles with regulators that imposed heavy costs in fines and settlements.
The bank said in a statement that the restructuring costs raised its non-interest expenses for the quarter but would lead to reduced costs in future quarters.
The Associated Press