Deutsche Bank stock: price increase due to strong numbers

Last Updated: 1. Februar 2024By

Deutsche Bank stock saw an increase of over 5 percent after the presentation of its financial results and is trading above the 12.50 Euro mark in morning trading (as of February 1, 2024, around 11 am). Like other banks, Germany’s largest financial institution is benefiting from the rise in interest rates.

In particular, Deutsche Bank impressed with its pre-tax earnings, which saw a further increase compared to the strong previous year. Of particular interest to investors: The DAX company will not only increase its dividend, but also raise its mid-term goals until 2025.

Deutsche Bank surpasses expectations in 2023 With revenues of 28.9 billion euros, Deutsche Bank’s earnings in the past fiscal year increased by around 6 percent. And its pre-tax earnings also saw a slight increase of 2 percent to 5.7 billion euros – the best result for the DAX company in 16 years.

Overall, the bank earned 4.21 billion euros, which is 16 percent less than in 2022. However, this profit was significantly higher than expected, as analysts had predicted an average of 3.66 billion euros. Additionally, the decrease compared to the previous year was mainly due to a one-time tax benefit in 2022.

In terms of its mid-term goals, the company remains optimistic and raises its forecast. Deutsche Bank expects revenues in the range of 32 billion euros by 2025. The average growth between 2021 and 2025 is now expected to be between 5.5 and 6.5 percent, instead of the previously planned 3.5 to 4.5 percent.

Deutsche Bank stock: A positive outlook Like all other banks, Germany’s largest financial institution is benefiting from the higher global interest rates. However, Deutsche Bank emphasizes that it is very well diversified and that interest income makes up less than half of its earnings. The company sees itself well positioned for the future, and cost savings from job cuts until 2025 are expected to make Deutsche Bank even more profitable.

From an investor’s perspective, the news regarding dividend policy is also positive. The management board plans to propose a dividend of 0.45 euros for the past fiscal year, which is an increase from the previous dividend of 0.30 euros. By 2025, the dividend is expected to even reach 1 euro per share, and the share buyback program of 675 million euros in the first half of 2024 will also benefit investors.