Deutsche Bank 1Q `A Disaster', Lender's Shares Sink: Street Wrap

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(Bloomberg) -- Analysts were united in deeming Deutsche Bank’s first-quarter results a disappointment as the German lender missed estimates across the board from revenue to profit and capital position. The shares tumbled as much as 4.2 percent in early Frankfurt trading, extending their year-to-date drop to 28 percent.

Goldman Sachs, Jernej Omahen and Marco Di Matteo

(Neutral, PT EU14.80)

  • 1Q missed estimates across the board, including pretax profit and CET1
  • Revenue from investment banking weaker vs peers, especially in equities, with Deutsche Bank -9% y/y vs peer group’s +32% (in $ terms)
  • Given lack of detail regarding strategic restructuring, the market will focus on comments from the conference call

Morgan Stanley, Magdalena Stoklosa

(Equal-weight, PT EU12.50)

  • Costs broadly in line, but revenue down with weakness in investment and retail bank
  • Scaling back activities in U.S. rates is “new and logical” given the competition
  • Strategy announcement is “encouraging,” but will be overshadowed by “very weak” numbers

DGWA, Stefan Mueller

(Buy)

  • “Quarterly numbers are a disaster”; JPMorgan needed “two days to achieve the same result Deutsche Bank just announced for the full quarter”
  • CEO Christian Sewing’s conference call speech was “more of the same,” but lacked details
  • Sticking with buy recommendation as large investors will now “force the bank to act” and some changes might come sooner then expected

Bankhaus Lampe, Neil Smith

(Buy, PT EU17)

  • Strategic adjustments “make sense” with a greater focus on European clients
  • Bank will still be able to achieve a “sustainable” ROTE of 8% until 2020

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