Deutsche Bank AG’s share price soared as its fixed-income traders joined Wall Street peers in reaping the profits from market volatility.
Revenue at the German lender’s securities unit in the second quarter rose 11% to €2.28 billion from a year earlier, according to a statement on Thursday. That compares with analyst estimates for €2.20 billion.
The lender’s shares rose as much as 6.1% in early trading, hitting the highest level in a decade.
The trading performance at Deutsche Bank mirrors the development at the biggest US banks, which on average posted a 14% increase in fixed-income trading.
“We are very happy to have delivered our highest second-quarter and first-half year profits since 2007,” Chief Executive Officer Christian Sewing said in the release. “This puts us on track to meet our 2025 targets.”
Chief Financial Officer James von Moltke told Bloomberg Television the entire investment bank division has had a “good start” to the current quarter. “That gives us some real confidence about what lies ahead,” he said.
The lender stands to benefit from companies around the globe seeking to diversify their bank relationships to include non-Wall Street banks, Sewing told Bloomberg Television earlier this week. European governments have vowed to spend hundreds of billions of euros on defense and infrastructure.
Deutsche Bank reiterated on Thursday that it has filed an application for a share buyback with the European Central Bank but didn’t specify an amount. It said that the implementation of capital rules known as CRR3 won’t impact its payout strategy, apparently in response around prior market speculation around the issue.
Income from advising on deals and capital raisings, an area Deutsche Bank recently built up, fell 29% in the second quarter. That resembles declines across Wall Street as clients put bond and stock sales on hold.
Von Moltke said in the Bloomberg TV interview that Deutsche Bank is “committed” to its investments in the unit even though recovery in deals generally has been taking longer than expected.
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