Deutsche Bank posted second-quarter pretax profit in line with expectations, helped by lower loan loss provisions amid weaker industry trends in investment banking, and Swiss bank UBS beat forecasts helped by strong equities and currency revenues.
Deutsche's corporate banking and securities division, which posted €779 million in pretax profit, and global transaction banking with €478 million, accounted for the lion's share of €1.52 billion in group pretax earnings, Germany's biggest lender said today.
Both divisions are now run by 47-year old Anshu Jain, who took sole control of the investment bank on July 1st.
Deutsche performed less strongly than in the first quarter, but 16 per cent stronger than during the year-earlier period, mirroring a trend among US peers like Goldman Sachs and Morgan Stanley.
Deutsche's other divisions, which include a wealth management and an asset management unit, turned a profit but failed to counterbalance the German lender's dependence on the division run by cricket fanatic Jain.
Analysts polled by Reuters had estimated that Germany's biggest lender would earn €1.6 billion in pretax profit in the quarter ended in June.
Deutsche Bank, which posted a second-quarter net profit of €1.2 billion and revenues of €7.2 billion, reiterated it aims to achieve €10 billion in pretax profit at the group level next year.
According to Thomson Reuters StarMine, Deutsche Bank trades at 6.6 times 12-month forward earnings, a discount to Swiss peers Credit Suisse and UBS, which trade at multiples of 7.8 and 8.8, and to US rivals Morgan Stanley and Goldman Sachs, which trade at multiples of 8.4 and 8.7.
Separately, UBS published forecast beating results today. Strong equities and currency revenues drove its second-quarter net profit well above forecasts despite choppy market conditions and client money withdrawals fell to their lowest level since early 2008.
UBS improved investment banking performance, although partially helped by a gain on own credit, stood out against weak results at several US rivals in the face of sovereign debt concerns, suggesting chief executive Oswald Gruebel's tough restructuring strategy is working.
But Mr Gruebel said in a letter to shareholders concerns about the sustainability of the global economic recovery "could lead to more subdued client activity levels across our businesses".
Analysts expected UBS to post second-quarter net profit of 1.34 billion Swiss francs.
Clients drained a total of about 5 billion francs, the lowest quarterly withdrawal UBS has experienced since it started to bleed assets at the start of 2008, but not sufficient for Gruebel to say he has turned the tide.
On Thursday, Credit Suisse posted second-quarter profit of 1.6 billion francs, helped by tax and accounting gains.
Reuters