Germany’s biggest commercial lender has posted an unexpected profit in the third quarter as it struggles to avoid a multi-billion dollar fine in the US and amid nagging doubts about its capital reserves.
Deutsche Bank logged a net profit of €278 million ($303 million) between July and September, after posting a record loss of €6 billion ($6.5 billion) in the same period last year, DW reported.
The profit figure, revealed on Thursday, strongly surprised analysts, who had expected another loss of about €949 billion ($1 trillion) in a poll for Factset and given the lender’s ongoing crisis.
Quarterly revenues at Germany’s biggest bank also increased to €7.5 billion ($8 billion)—just slightly higher from the third quarter 2015.
Deutsche’s chief executive John Cryan said in a statement that the bank was making “good progress” in restructuring its business.
Deutsche Bank is fighting a $14 billion demand from the US Department of Justice over the misselling of mortgage-backed securities in the run-up to the 2008/2009 financial crisis.
This and a series of other lawsuits threatening to cost the bank dearly has forced Deutsche Bank to set aside more money for legal costs in the quarter, with litigation reserves rising to €5.9 billion ($6.4 billion.)
“Discussions with the DoJ to resolve its investigation of Deutsche Bank’s pre-financial crisis RMBS business are ongoing,” Deutsche Bank said in a presentation. It gave no information on when it expects to settle the case, but hopes to get away with a significantly reduced fine of around €5.4 billion ($5.9 billion), according to sources familiar with the matter.
