Deutsche Bank AG (DB) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023

April 27, 2023 5:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by. I'm Natalie, your Chorus Call operator. Welcome, and thank you for joining the Deutsche Bank Q1 2023 Analyst Conference Call. Throughout today's recorded presentation, all participants will be in a listen-only mode. [Operator Instructions]. I would now like to turn the conference over to for closing -- sorry, Deputy Head of Investor Relations. Please go ahead.

Unidentified Company Representative

Thank you for joining us for our first quarter 2023 results call. As usual, our Chief Executive Officer, Christian Sewing, will speak first; followed by our Chief Financial Officer, James von Moltke. The presentation, as always, is available to download in the Investor Relations section of our website, db.com.

Before we get started, let me just remind you that the presentation contains forward-looking statements, which may not develop as we currently expect. We, therefore, ask you to take notice of the precautionary warning at the end of our materials.

With that, let me hand over to Christian.

Christian Sewing

Thank you, , and welcome from me, too. It's a pleasure to discuss our first quarter 2023 results with you today, and we are pleased with the progress we continue to make towards our 2025 goals.

The first quarter was marked by turbulent conditions in the banking sector, particularly in March in addition to the macroeconomic challenges. However, our transformation has provided us with strong foundations, which enabled us to navigate these challenges successfully.

We delivered on four critical --. First, profitability. Pretax profits increased by 12% to EUR 1.9 billion and post-tax profit by 8% to EUR 1.3 billion which on both counts, represents our strongest quarter since 2013. Our cost-to-income ratio was 71% this quarter, 2 percentage points better than the prior year, driven by positive operating leverage. We also generated an 8.3% post-tax return on tangible equity in this period.

As you know, annual bank levies are recognized in the first quarter. Spreading these bank levies equally across the four quarters of the year, our first quarter cost income ratio would be 67% with a post-tax return on tangible equity of 10%, putting us well on track to our 2025 targets.

Second, we proved the strength of our franchise. Our business model is focused on four client-centric businesses, which complement each other and provide a well diversified earnings mix as this quarter shows. We delivered revenues of EUR 7.7 billion, up 5% over the prior year quarter.