DEUTSCHE Bank smashed expectations yesterday by reporting record profits at its investment banking arm, as it deflected speculation over its role in mortgage deals similar to the one over which Goldman Sachs is facing civil fraud charges.
Deutsche made a pre-tax profit of €2.8bn (£2.43bn) over the first quarter, 55 per cent higher than in 2009. Of that, €2.7bn came from the corporate and investment bank, a record quarterly result boosted by strong performances in sales and trading.
The German bank said its results were hit by a net €58m charge on its acquisition of private bank Sal. Oppenheim, as well as €350m of compensation expenses from deferred bonus payouts and €120m from the government’s bank payroll tax.
Chairman Josef Ackermann said the investment bank’s performance was “all the more remarkable as it was achieved despite the fact that the bank has significantly reduced its risk positions and cut its proprietary trading activities to a very low level”.
Finance director Stefan Krause smoothed investor concerns over fears the bank could face a Goldman-style lawsuit from the US Securities and Exchange Commission.