Estimated read time: 1-2 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
FRANKFURT, Germany (AP) — Deutsche Bank's net profit rose in the second quarter, but legal expenses stemming from investigations of the bank's past conduct also increased and the bank's new co-CEO said its financial performance was unsatisfactory.
John Cryan said Thursday that Deutsche Bank needed to cut costs, shed unprofitable activities and improve "poor overall returns to shareholders."
Net income increased to 818 million euros ($899 million) in the April-June quarter from 238 million euros in the same quarter last year. Taxes fell and profits rose from trading stocks and bonds in volatile markets.
Yet litigation expenses were up, to 1.2 billion euros from 470 million euros. The bank paid $2.5 billion in the first quarter to settle allegations it manipulated a key interest rate benchmark, and faces other probes.
Cryan took over July 1 after co-CEOs Anshu Jain and Juergen Fitschen announced they were leaving. Fitschen will remain until May, 2016, after which Cryan is to become sole CEO.
The bank has struggled with uneven profits, repeatedly eroded by new set-asides for litigation expenses. Jain and Fitschen embarked on efforts to cut costs and strengthen the bank's finances by getting rid of riskier investments and activities. Cryan has said he will update those strategy efforts by the end of October.
In a message to employees made public by the bank, Cryan said the 17 percent increase in revenue showed the bank's potential, but that "too much of these revenues were used up by rising costs."
Profits, though higher, were "nowhere near good enough," he wrote.
Deutsche Bank shares rose 1.8 percent to 31.02 in morning trading in Europe.
Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
