Deutsche Bank Misses Dividends from Stock Trading Rally There is an urgent need to find other sources of business growth

Deutsche Bank's bond trading has outperformed most of its peers amid the industry's overall decline. But other parts of investment banks have been underperforming.

Deutsche Bank's M&A and Transactions divisions both saw profits and revenues decline, while fixed income deals slid 12 percent. The rebound in consulting fees and stock trading was enough to allow the investment banking divisions of UBS and Barclays to achieve a revenue jump, but Deutsche Bank's transaction fee revenue was lower than its U.S. counterparts and has also exited the stock trading business.

The results highlight the urgent need for CEO Christian Sewing, who has so far relied heavily on the expansion of the fixed income business to turn around, to find other sources of growth. But the lending business, which was initially at the heart of TheEwing strategy, still underperformed due to negative interest rates. At the same time, unexpected expenses forced it to abandon its goal of reducing costs this year and next, and forced the bank to charge a €583 billion transformation fee this quarter.

While Deutsche Bank slightly raised its investment bank outlook, the third-quarter profit was higher than expected due to lower non-performing loan provisions, which led to a decline in the company's share price.

"Deutsche Bank has been solid for another quarter," analysts such as Citigroup's Andrew Coombs said in a note, citing higher-than-expected pretax profits. "However, this is mainly due to a reduction in loan losses."

This article originated from the Financial Circle Network