Deutsche Bank AG's net profit increased significantly in the third quarter of 2022 despite a decline in dealmaking, as it charged greater interest on loans and traded more currencies and bonds in a tumultuous market. The bank’s net Profit for Q3 2022 increased to EUR 1,210 million from EUR 306 million a year earlier. It was the ninth straight quarter of profit, an impressive streak after years of losses, and it came while the economies of Germany and Europe were experiencing significant headwinds.
Revenue from the investment banking division increased by 6% YoY, and revenues from the fixed income and currency trading division increased by 38% YoY, which helped to offset the weaker performance of Credit Trading. Among Deutsche's other significant divisions, corporate bank revenues increased by 25%, while private bank revenues increased by 13%.
Markets have been shaken by the uncertainty, which has put a freeze on mergers & acquisitions, initial public offerings, and leveraged financing a riskier form of financing used to finance private equity buyouts. The investment banking division of Deutsche Bank depends less on that and more on the trading of currencies and bonds, which booms in a volatile market, that helped the bank outperform its competitors. Due to an uncertain outlook brought on by the Russia-Ukraine conflict and the risk of a recession in Europe, the bank built provisions of EUR 350 million in the third quarter of 2022, up from EUR 117 million in the same period a year earlier.
Globally, inflation has been gradually increasing. To reduce it, central banks are hiking interest rates, which has increased borrowing costs for households and businesses and slowed economies. Gas shortages from Russia are also a problem for Germany, which is affecting the country's energy-intensive sectors. Deutsche Bank benefited from the higher interest rates. It was able to charge customers and the increasing loan volume as companies continued to borrow to cover the rising costs of conducting business. The bank will continue to grow as a result of anticipated future rate increases from the European Central Bank.
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