Deutsche Bank has unveiled plans to increase shareholder returns through 2025 and beyond, in spite of a decrease in net profit triggered by rising costs and taxes. The bank reported an uptick in Q3 revenue and anticipates freeing up approximately 3 billion euros ($3.18 billion) of additional capital by reducing risk-weighted assets and expecting a smaller Basel III impact than previously estimated.
This additional capital is intended to fuel investment growth and support the bank's pledge to return EUR8 billion to shareholders for the period of 2021-2025. CFO James von Moltke hinted that the new capital plan may exceed initial estimates, but stated it's too early to confirm amounts and timings. He also suggested the possibility of increased share buybacks next year, surpassing previous plans.
The German banking giant, which initiated a EUR450 million buyback in August, has distributed approximately EUR1.57 billion through share repurchases and dividends over 2022 and the first three quarters of 2023. It aims to return more than EUR1 billion in 2023 and a total of EUR1.75 billion across 2022 and 2023.
Despite the anticipated increase in shareholder returns, Deutsche Bank experienced a fall in Q3 net profit to EUR1.03 billion on revenue of EUR7.13 billion. The bank forecasts EUR29 billion in net revenue for the year but warned about one-off items impacting Q4 earnings.
Q3 loan loss provisions saw a decrease, dropping to EUR245 million. The bank reported a 30% effective tax rate, a decline in net interest income to EUR3.34 billion, an increase in non-interest expenses to EUR5.16 billion, and registered inflows of EUR11 billion across its private bank and asset-management businesses.
In light of these developments, Deutsche Bank anticipates a normalization of deposit revenues and a rise in noninterest rate revenue streams.
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