Do Analysts Think Deutsche Bank Can Post Profits in 1Q16?



1Q16 estimates

Analysts are expecting Deutsche Bank to report 1Q16 earnings of 0.43 euros per share and net income of 453 million euros. They expect revenues of 8.0 billion euros and pre-tax profits of 475 million euros.

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The year ahead

For 2016, analysts expect Deutsche Bank to report earnings of 1.4 euros per share and net income of 2.1 billion euros. They expect revenues for 2016 to be 31.8 billion euros. Analysts also expect the bank to deliver a return on assets of 0.08x and a return on equity of 1.1% for 2016.

European banks (EUFN) such as UBS (UBS), Credit Suisse (CS), and Barclays (BCS) have been struggling to maintain their profitability amid negative interest rates and strict regulations. This year is expected to be the peak of restructuring for Deutsche Bank. It plans to incur restructuring and severance expenses of 1 billion euros in 2016. Litigation charges will continue to put pressure on 2016 earnings, but they’ll be lower than 2015 levels. These cost pressures are expected to be offset by savings.

On an adjusted basis, costs are expected to be flat over the year. RWAs (risk-weighted assets) from non-core operating units are expected to decline, but operational risk RWAs will likely offset them. Overall, RWAs are expected to be flat in 2016. The common equity tier 1 ratio will probably decline during the first quarter but increase throughout the rest of the year.

Next, let’s look at the outlook for Deutsche Bank’s trading and investment banking revenues.


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