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Germany’s largest bank, Deutsche Bank, reported a significant increase in third-quarter profits, driven by the resolution of investor lawsuits related to its Postbank division.
Net profits reached 1.46 billion euros ($1.58 billion), a 42 percent rise from the previous year. Analysts had predicted a figure of 1.32 billion euros, according to FactSet.
The profits were boosted by the settlement of lawsuits with former Postbank shareholders who had taken legal action against Deutsche Bank, claiming they were shortchanged in a 2010 takeover.
This settlement allowed Deutsche Bank to reduce provisions that had been allocated for the cases.
Deutsche Bank CEO Christian Sewing stated, “We made significant progress in resolving legacy litigation issues, while also achieving a record third-quarter profit in our core business.”
In the second quarter, Deutsche Bank had reported a loss of 143 million euros, largely due to the substantial provision set aside for the Postbank matter.
Following the latest results, Sewing announced that Deutsche Bank would seek further share buybacks.
During the July-September period, revenues increased by five percent year-on-year to 7.5 billion euros, with a notable 11 percent growth in the investment banking and asset management divisions.
These gains offset declines in corporate and retail banking, as the positive effects of higher eurozone interest rates began to wane.
Deutsche Bank has undergone significant restructuring in recent years, shifting its focus towards retail and corporate banking after facing numerous scandals related to its earlier heavy reliance on investment banking in the early 2000s.
This revised strategy has proven successful, leading to greater profitability for the bank.
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