DB - Deutsche Bank Q4 profit grows but includes tax benefit asset sale gain

Deutsche Bank ( NYSE: DB ) shares fell 2.1% in Thursday U.S. premarket trading after Germany's biggest lender's Q4 results rose, but included gains from a tax benefit and the sale of a business in Italy. The company has spent the last three and a half years restructuring to stem expenses and focus on its most profitable businesses.

"By refocusing our business around core strengths we have become significantly more profitable, better balanced and more cost-efficient," CEO Christian Sewing said. "In 2022, we demonstrated this by delivering our best results for fifteen years."

The bank also reaffirmed its 2025 targets.

Net interest income contributed to the top line as well as higher revenue from its Corporate Bank and Private Bank operations. Investment Bank and Asset Management saw revenue fall from both the prior and year-ago quarters.

Q4 after-tax profit was €1.98B ($2.18B), including a tax benefit of €1.4B, compared with after-tax profit of €1.24B in Q3 and €315M in Q4 2021. Profit before tax was €775M, including a €310M gain on the sale of Deutsche Bank Financial Advisors in Italy, increased from €82M in Q4 2021.

Q4 net interest income of €2.74B increased from €3.66B in the prior quarter and from €2.92B in the year-ago quarter. Net interest margin was 1.5%, roughly flat with Q3 and up from 1.2% a year earlier.

Q4 total net revenue of €6.32B climbed from €6.92B in Q3 and from €5.90B in Q4 2021.

Corporate Bank revenue of €1.76B increased 13% Q/Q and 30% Y/Y; Investment Bank revenue of €1.68B dropped 29% Q/Q and 12% Y/Y; Private Bank revenue of €2.51B climbed 11%Q/Q and 23% Y/Y; Asset Management revenue was €609M, down 8% Q/Q and 23% Y/Y.

Q4 provision for credit losses were €351M, compared with €350M in the prior quarter and €254M in the year-earlier period.

Deutsche Bank's ( DB ) Q4 noninterest expenses of €5.19B rose from €4.95B in the previous quarter and dropped from €5.56B in the year-earlier quarter. Excluding transformation charges and bank levies, its costs in Q4 2022 were €4.8B.

CET1 capital ratio of 13.4% vs. 13.3% in Q3 and 13.2% in Q4 2021.

Earlier, Deutsche Bank ( DB ) reports Q4 results; reaffirms 2025 targets

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