FRANKFURT (dpa-AFX) - Bright spots for Deutsche Bank's fund subsidiary DWS: the company again collected more money from investors in the second quarter. In addition, the clarification of the "greenwashing" allegations in the U.S. is apparently making progress. DWS says it is "in advanced discussions" with the U.S. Securities and Exchange Commission (SEC) to conclude its investigation. The final outcome has not yet been determined, the company said Wednesday in its interim report for the first half of the year. However, the company now significantly increased its provisions.

On the stock market, the news was well received. The DWS share increased at times by almost four percent. In the afternoon, it was still one of the strongest stocks in the SDax small cap index, with a recent gain of over two percent.

According to the company, since January 1 DWS has set up new provisions for operational risks totaling two million euros and for other risks totaling 21 million euros. Other" reportedly includes regulatory proceedings and other matters. The provisions are "short-term in nature" and are expected to be utilized over the next year, the interim report continues.

The SEC's investigations involve allegations that DWS has portrayed itself as more sustainable than it is. The fund company is also under investigation in Germany. At the end of May 2022, investigators searched rooms at Deutsche Bank's headquarters in Frankfurt as well as in the neighboring building of its subsidiary DWS. Less than 24 hours after the raid began, Deutsche Bank and DWS announced the departure of then-DWS chief Asoka Wohrmann. He was succeeded a few days later by Deutsche Bank manager Stefan Hoops.

The background to the investigations in this case are also "greenwashing" allegations against DWS. According to the allegations, the asset manager overstated sustainability criteria and was not as far advanced in environmental and climate protection issues as stated. The investigation was initiated by DWS's former sustainability officer, Desiree Fixler.

In the second quarter, day-to-day business at DWS went better than expected. The bottom line was that an additional 9.3 billion euros flowed into its funds. However, 3.9 billion of this came from an existing real estate fund whose management DWS took over from another provider.

Compared with the first quarter, the company increased adjusted earnings by seven percent to 668 million euros. This was only just below the level achieved in the second quarter of 2022. However, profit before tax fell by 13 percent year-on-year, and net income fell by six percent to 145 million euros. DWS thus performed better across the board than analysts on average expected.

The Executive Board reported success in its efforts to reduce the company's costs. To this end, jobs are being cut at the second and third management levels. In the second quarter, 61 percent of earnings were now eaten up by adjusted costs. In the first quarter, the figure had been 66.3 percent - down from 60.6 percent in 2022 as a whole.

The Executive Board headed by DWS CEO Hoops had already announced a somewhat higher ratio for this year, as spending on restructuring the company will reach its peak this year. Nevertheless, the ratio is to remain below 65 percent./stw/lew/he