Why German Multinational Company Deutsche Bank's Shares Are Surging Today

Deutsche Bank AG DB shares are trading higher by around 7% after it reported Q3 FY23 results. 

The bank reported revenue growth of 3% Y/Y to €7.13 billion. In USD terms, revenue of $7.76 billion beat the consensus of $7.11 billion.

Corporate Bank net revenues increased 21% Y/Y to €1.89 billion on double-digit growth across segments, led by strong net interest income and continued pricing discipline.

Private Bank revenues rose 3% Y/Y to €2.34 billion on higher revenues from deposit products, aided by increased net interest margins. Investment Bank net revenues declined 4% Y/Y to €2.27 billion in the quarter, mainly on lower FIC Sales & Trading (FIC) revenues (-12% Y/Y).

Asset Management revenues were down 10% Y/Y to €594 million, reflecting lower performance fees, the mark-to-market of co-investments, and FX movements.

Noninterest expense grew 4% Y/Y to €5.2 billion on higher nonoperating costs.

Provision for credit losses stood at €245 million (down from €401 million in Q2 FY23) in the quarter.

EPS stood at €0.56 in Q3 FY23 vs. €0.57 a year ago. In USD terms of $0.61, beat the consensus of $0.49.

Common Equity Tier 1 capital ratio improved to 13.9%, up from 13.8% in Q2 2023, above the 2025 capital objective of around 13%.

At the end of Q3, liquidity reserves stood at €245 billion, up from €244 billion at the end of Q2 2023, including high-quality assets of €210 billion.

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"These results demonstrate strong and sustained business growth momentum combined with continued cost discipline. Furthermore, we have materially improved our capital outlook thanks to our strong results and focused capital efficiency measures. This gives us scope to invest in growing our Global Hausbank model, further improve returns, and increase and accelerate distributions to our shareholders," said Christian Sewing, Chief Executive Officer.

DB continues to target incremental operational efficiencies of €2.5 billion annually by 2025. By the end of Q3 FY23, around € 10 billion of Deutsche Bank's 2025 RWA optimization target of € 15-20 billion was already achieved, without material impact on revenues.

In Q3, DB bought back shares worth up to €271 million by the end of 2023, of its €450 million expected to be completed by year-end. 

DB is on track to share repurchases and dividends of over €1 billion in 2023, bringing total distributions of around €1.75 billion over 2022 and 2023, with further buybacks expected in 2024.

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Price Action: DB shares are up 6.46% at $10.71 premarket on the last check Wednesday.