(Bloomberg) — Deutsche Bank AG’s revenue from fixed-income trading jumped in the second quarter as the unit outperformed most of its US peers. <\/p>\n
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The metric rose 16% over last year’s period to hit \u20ac2.6 billion ($3 billion) “driven by rates and credit,” according to a statement Wednesday. That compared with analyst expectations for \u20ac2.4 billion. <\/p>\n
The increase exceeded the average across the big Wall Street banks, at 13%, according to Bloomberg Intelligence. Deutsche Bank said the result was a record for the second quarter, helping to push profit in the period to \u20ac1.9 billion. <\/p>\n
Trading started “constructively” in the third quarter and the “pipelines look pretty full” for the business as well as the deal advisory unit, Chief Financial Officer Raja Akram said on Bloomberg TV. “It gives me a lot of optimism that the second half of the year could potentially be as strong as the first half.” <\/p>\n
Germany’s largest bank also announced a new share buyback of \u20ac500 million and confirmed its full-year revenue outlook while saying it’s “on track to deliver strong operating performance” this year. <\/p>\n
Shares in Deutsche Bank rose as much as 6% and were 3.9% higher at 9:22 a.m. in Frankfurt. <\/p>\n
Chief Executive Officer Christian Sewing has pledged to boost profitability and investor payouts as he seeks to close a persistent valuation gap between Deutsche Bank and many of its European peers. Continuing growth across the fixed-income unit, especially in the Americas, is a major part of that plan. <\/p>\n
Deutsche Bank’s competition in the US reported booming results in the second quarter driven by trading in equities, pushing the country’s six biggest banks to $100 billion in combined first-half profit. Sewing shuttered that business several years ago as part of a major restructuring. <\/p>\n
Shares in BNP Paribas SA and Barclays Plc declined after they reported second-quarter results that didn’t quite measure up to Wall Street, even though they each posted strong growth in equities trading. <\/p>\n
While the economic impact from higher energy prices on the back of the war in Iran could complicate Sewing’s task, he expects to benefit at some point from major political reforms in Germany. He has become an influential voice in Berlin and has shared his views on several key projects pursued by the government, Bloomberg has reported. <\/p>\n
In an earnings document, Sewing listed several trends that could provide “upside” to Deutsche Bank’s 2028 profitability target. He highlighted rising infrastructure and defense spending in Germany, advances in artificial intelligence that could make the lender more efficient, and increasing “political will” among European regulators to place more emphasis on bank competitiveness. <\/p>\n
Sewing has shied away from major acquisitions at a time when many big European Union banks are chasing deals. UniCredit SpA is seeking to take over Germany’s Commerzbank AG, Banco Santander SA has recently bought Webster in the US and TSB in the UK, and BNP Paribas has acquired Axa Investment Managers. <\/p>\n
(Updates with shares in sixth paragraph.) <\/p>\n
Most Read from Bloomberg Businessweek <\/p>\n
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