FRANKFURT (dpa-AFX) - Cost-cutting efforts and booming earnings in the capital market business have brought Deutsche Bank a billion-euro profit at the start of the year. At the same time, Germany's largest financial institution is preparing for further setbacks in the commercial real estate market and as a result of the IT breakdowns at Postbank. However, the management assumes that these burdens will decrease over the course of the year, said CFO James von Moltke in a conference call on Thursday. Like the market as a whole, the share recently lost around 0.5 percent of its value.

In the first three months of 2024, pre-tax profit increased by ten percent to just over two billion euros compared to the same quarter of the previous year. The bottom line for the shareholders of the Frankfurt-based DAX-listed company was a net profit of around 1.3 billion euros - also ten percent more than a year ago. Overall, this was the "best result since 2013", said Group CEO Christian Sewing.

However, Deutsche Bank must "earn the trust of its customers anew every day" in order to achieve its goal of "returning to the top of the European banks in the medium term", Sewing wrote to the workforce.

The image has recently been tarnished by mishaps at Postbank, which belongs to the Group. The transfer of customer business to Deutsche Bank's computer systems last year did not run smoothly. At times, customers were unable to access their accounts, mortgages were delayed and people with seizure protection accounts were at times unable to access urgently needed money.

As the problems dragged on for months, the financial supervisory authority Bafin sent a special representative to the bank. By the end of March 2024, the bank said it had finally cleared the backlog of customer-critical processes. However, the bank still sees room for improvement in terms of service quality.

A few things still need to be "tidied up" at Postbank, said CFO von Moltke. "There are some remaining non-customer-specific problems that we will rectify in the second quarter." The recent warning strikes at Postbank in the course of the current collective bargaining round could also have led to further delays in customer service. Von Moltke does not want to reveal how many Postbank customers have been compensated so far and how much money has been paid out. According to him, the chaos at Postbank is likely to cost Deutsche Bank a total of around 100 million euros.

Deutsche Bank set aside 439 million euros in the first quarter, 18 percent more than a year earlier, for the problems at Postbank and possible loan defaults in the wake of the crisis in the office and retail real estate markets, particularly in the USA. For the year as a whole, the Group expects risk provisions to be at around the previous year's level, with EUR 1.5 billion in 2023.

The Executive Board is putting the brakes on costs. At the beginning of February, Group CEO Sewing announced the reduction of 3,500 jobs by the end of 2025. This includes 800 jobs that the bank had already announced last year. Jobs will mainly be cut in areas that are not directly related to customers. The sales network in Germany will be streamlined and internal processes will be simplified and automated. The bank put the savings from "completed efficiency measures" at 1.4 billion euros at the end of the first quarter.

The tailwind from the sharp rise in interest rates, from which Deutsche Bank, like other financial institutions, is benefiting, has already waned somewhat, as the interim balance sheet for the first quarter shows. However, Germany's largest financial institution was able to compensate for the lower net interest income by increasing commission income in all business areas. The investment bank in particular, with its flourishing bond and currency trading, ensured that income - i.e. the Group's total income - was slightly higher than in the same period last year at around 7.8 billion euros./ben/zb/DP/jha