Deutsche Bank halts buyback plan as H1 profits sink

Deutsche Bank shares tanked on Wednesday after the German bank paused its share buyback programme amid a sharp decline in first-half profits following a big charge relating to its 2010 takeover of Postbank.

Adjusted pre-tax profits in the second quarter totalled €1.7bn, up from €1.4bn a year earlier, though this year's adjusted figure excludes the €1.3bn of litigation provisions related to its takeover of Postbank on the back claims it underpaid for the unit.

When including this cost, the company posted a pre-tax profit of just €2.4bn for the first half of 2024, down from €3.3bn in the first half of 2023.

Nevertheless, net revenues for the half were up 2% year-on-year at €15.4bn while adjusted costs fell 2% to €10.1bn.

Looking ahead, the company also said provisions for credit losses to be more than 30 basis points (bp) of its average loan book in 2024, higher than earlier guidance of 25bp to 30bp.

"This reflects commercial real estate provisions which are moderately lower, although improving at a slower-than-expected pace, as well as improvements in the Corporate Bank," Deutsche Bank said in a statement.

Meanwhile, the bank cancelled plans for a second share repurchase this year but maintained its goal of returning a total of €8bn to shareholders over 2021 to 2025.

The company said: "We remain dedicated to creating value for our shareholders; our earnings power, and the progress we have made with capital optimisation, give us full confidence that we can maintain our trajectory to increase distributions beyond our original goal of €8bn in respect of the financial years 2021 to 2025."

Deutsche Bank's stock was down 6.8% at €14.61 by 1142 in Frankfurt.