Deutsche Bank’s struggling investment bank has exceeded expectations for the fourth quarter as the German lender reported a sharp rise in revenues from bond trading and advising on the sale of debt.
The bank said revenues from its fixed income trading division — which includes bonds and currencies — rose 31 per cent from the previous year. Debt origination revenue increased 27 per cent.
Mark Fedorcik, head of the investment bank, told the Financial Times that the fourth-quarter performance shows that the division “can stabilise revenues and in some cases grow them”, adding that it has “seen a healthy continuation of this into January”.
“Our market share is beginning to stabilise and come back,” Ram Nayak, Deutsche’s head of fixed income and currency sales and trading, told the Financial Times, adding that the lender has seen a “material improvement in our client volumes” among its top 100 clients in Europe and globally.
However, Deutsche’s growth lagged behind that of its five biggest US rivals, which reported combined gains of more than 60 per cent. Mr Nayak said that the gap was explained by strong growth in business areas that Deutsche left a few years ago, such as securitised rates products.
Deutsche’s common tier one equity ratio — a key indicator for its balance sheet strength — was also better than expected at 13.6 per cent of risk-weighted assets as the lender’s divestment of unwanted assets through its “bad bank”…