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Thursday, 30 January 2025 10:52
Banks: European Heavyweights Break the Magic Barrier
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banks: european heavyweights break the magic barrier. two of the largest european financial institutions, spain's bbva and deutsche bank, presented their annual figures on thursday. the trend is largely positive, but there is also a downside. the spanish bbva significantly increased its net profit in the fourth quarter. the annual profit thus just exceeded the €10 billion mark for the first time. the bank, which is also very active in mexico, benefited from higher commission income, a good trading business, and higher interest rates. in the fourth quarter, net profit amounted €2,43 billion, an increase of 18 percent. in addition, a final dividend of €0.41 per share and a share buyback worth around €1 billion were announced. the bank intends to distribute 40 to 50 percent of its profit to shareholders. the share price reacted positively to the figures, reaching its highest level for 15 years. transition year with special charge. at deutsche bank, the event that ultimately impacted the annual result was already known in advance. the bank was defeated in a legal dispute lasting several years and had to pay the shareholders of the acquired postbank an additional price. the dax-listed group earned just under €5,3 billion before taxes. compared to the previous year, this was a drop of around 7 percent and therefore below market expectations. the return on tangible equity amounted to 4.7 percent. excluding special charges, income grew by €1,2 billion to €30,1 billion. this is more than compensated for higher provisions. the investment bank, the private customer business including postbank, and the fund subsidiary dws all recorded an upward trend. only the business customers bank recorded losses. target return on equity of 10 percent. ceo christian sewing is sticking to the target of a return on equity of 10 percent in the current year 2025. income should continue to grow to around €32 billion. the forecast is only slightly less ambitious when it comes to the cost/income ratio. sewing emphasized that 2024 was an important transition year in the implementation of the strategy. «we have always said that 2025 will be decisive for us. at the end of this year we will be judged on whether we have been successful with our transformation and growth strategy.». deutsche bank shares fell significantly on thursday morning.
Banks: European Heavyweights Break the Magic Barrier
Two of the largest European financial institutions, Spain's BBVA and Deutsche Bank, presented their annual figures on Thursday. The trend is largely positive, but there is also a downside.
The Spanish BBVA significantly increased its net profit in the fourth quarter. The annual profit thus just exceeded the €10 billion mark for the first time. The bank, which is also very active in Mexico, benefited from higher commission income, a good trading business, and higher interest rates.
In the fourth quarter, net profit amounted €2,43 billion, an increase of 18 percent. In addition, a final dividend of €0.41 per share and a share buyback worth around €1 billion were announced. The bank intends to distribute 40 to 50 percent of its profit to shareholders. The share price reacted positively to the figures, reaching its highest level for 15 years.
Transition Year with Special Charge
At Deutsche Bank, the event that ultimately impacted the annual result was already known in advance. The bank was defeated in a legal dispute lasting several years and had to pay the shareholders of the acquired Postbank an additional price.
The DAX-listed group earned just under €5,3 billion before taxes. Compared to the previous year, this was a drop of around 7 percent and therefore below market expectations. The return on tangible equity amounted to 4.7 percent.
Excluding special charges, income grew by €1,2 billion to €30,1 billion. This is more than compensated for higher provisions. The Investment Bank, the private customer business including Postbank, and the fund subsidiary DWS all recorded an upward trend. Only the Business Customers Bank recorded losses.
Target Return on Equity of 10 Percent
CEO Christian Sewing is sticking to the target of a return on equity of 10 percent in the current year 2025. Income should continue to grow to around €32 billion. The forecast is only slightly less ambitious when it comes to the cost/income ratio.
Sewing emphasized that 2024 was an important transition year in the implementation of the strategy. «We have always said that 2025 will be decisive for us. At the end of this year we will be judged on whether we have been successful with our transformation and growth strategy.»
Deutsche Bank shares fell significantly on Thursday morning.
