DB - Deutsche Bank lowers 2022 cost guidance on inflation bank levies Ukraine war

While Deutsche Bank ( NYSE: DB ) shares are slipping 1.7% in Wednesday U.S. premarket trading after Germany's largest lender revised its cost guidance due external factors including inflation, costs related to the Ukraine war, and higher-than-expected bank levies.

In addition, the current operating environment will make it more challenging to achieve its 2022 targets for post-tax return on tangible equity of 8% for the Group and above 9% for its Core Bank, it said.

While Deutsche Bank ( DB ) said it's committed to its cost-cutting plan, the bank revised 2022 guidance for cost/income ratio to mid- to-low-70s percent from its previous target of 70%. For the first six months of the year, its cost/income ratio was 73%, down 5 percentage points from the year-ago period.

The bank reaffirmed its guidance for revenue of €26B-€27B ($26.4B-$27.4B), common equity tier 1 capital ratio of above 12.5% and leverage ratio of ~4.5%.

Targets for 2025 are also reaffirmed — revenue CAGR of 3.5%-4.5%; post-tax ROTE of more than 10%, and cost/income ratio of below 62.5%. It also maintains its target for cumulative capital distributions of ~€8B for 2021-2025.

Q2 after-tax profit was €1.21B vs. €1.23B in Q1 and €828M in the year-ago quarter.

Q2 net interest income of €3.37B rose from €2.88B in the prior quarter and from €2.66B in the year-ago quarter.

Q2 provision for credit losses of €233M vs. €292M in the prior quarter and €75M in Q2 2021.

Q2 noninterest expenses of €4.87B dropped from €5.38B in Q1 and from €5.00B a year ago.

CET1 capital ratio of 13.0% slipped from 13.2% in the year-ago quarter.

Earlier, Deutsche Bank reports Q2 results, reaffirms some FY2022 guidance

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