PRESS RELEASE
Deutsche Bank Turning into a "Zero Bank"
July 27, 2016 (EIRNS)—The net profit of Germany’s biggest bank is down to almost zero: in the second quarter of this year, the bank made only EU18 million of profit. In the same quarter a year ago, it was EU796 million. This implies a loss in profits within one year by 97.5%. At the Frankfurt exchange this morning, Deutsche Bank’s shares dropped by 6%.
In the first quarter of 2016, the bank still made a net profit of EU236 million; against that, Q2 brought a loss by 94%. The sector "global markets" had most of the losses in Q2 with 28%, followed by asset management with -18% and other wealth management with -12%; the only profitable sector was Postbank, with a net profit of 13%.
The said Q2 mini-profit, however, is due to relatively low legal expenses of EU120 million from April to July; a year ago, the bank had to shoulder EU1.2 billion during the same period. CEO John Cryan, a British banker from the investment branch, said he is content with the performance of the bank to the extent that it is going through a "rather difficult period," but he did not give any indication that a fundamental change of strategy is considered. Should the bank’s performance not improve, even more streamlining and cost-cutting would be on the agenda, Cryan said in the context of the Q2 figures.
As for "Project Jade," which, according to recent media leaks, is a new strategy of Deutsche Bank to survive by separating investment and commercial activities from each other, a bank spokesman declared: "Project Jade is not about splitting the bank. It is rather a project that has been running for quite some time, to simplify the bank as such and in its structure." A similar denial of separation plans was made by Marcus Schenck of the board, saying in a conference call with select media this afternoon, "Some people believe that we are forced to sell Postbank in 2017, but that is not the case."
