Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
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| Always uncertain on litigation, but clearly, we would hope to do much better going forward than in the most recent quarter |
| We saw solid net inflows in assets under management of €7 billion in the quarter with €4 billion in investment products and €3 billion in AuM deposits |
| In the second half of the year, we expect approximately 70 basis points of headwinds from various items we have discussed with you before, notably impacts from model and methodology changes, share buybacks and the Numis acquisition and our leverage ratio was 4.7% at the end of the second quarter, four basis points up versus the prior quarter based on our strong organic capital generation |
| We are reaping the benefits of a complementary and well-balanced earnings mix |
| Organic capital generation contributed 16 basis points to the increase, reflecting our strong net income which was offset mainly by higher regulatory deductions for common equity dividends and AT1 coupons |
| Second, we have proven our earnings power |
| We generated profit before tax of €3.3 billion in the first six months, up 2% over last year and the highest first half since 2011, after absorbing more than €700 million in non-operating costs, including restructuring related to operational efficiencies |
| Of course, in this regard, also the most recent upgrades from rating agencies again help us, because whenever we get this obviously, it helps to increase revenues and new clients onboarding |
| So lots of different drivers we'll need to unpack in time, but one that I think is overall a bullish sign for the industry of the value that banks, frankly, are providing to their clients, not just in corporate and middle market but also in the retail space |
| Third, our balance sheet and capital position are resilient |
| Our CET1 ratio has risen to 13.8%, driven by strong organic capital generation |
| We have sound liquidity and a solid deposit base, which we slightly increased in the second quarter |
| Of course, we are benefiting from the NII and get back to that in a second, but if you think about what kind of discussions and mandates we win with our corporate banking clients around the world when it comes to reorganising their networks, reorganising their supply chains, making sure that we, obviously, then follow up with the cash management systems around the world, as an answer to their reorganised network, then this brings us a lot of new mandates, which, honestly, is even above our expectations |
| A, the NII curve is holding up far stronger than we initially planned and I do believe that with regard to our own existing plan, we see positive surprises also in the second half of '23 And I do also think in '24 |
| The first one is, you mentioned that you've now got very friendly relations with ECB and I think it's a nice positive surprise that you've got this approval |
| The growth in investment and other fee income, as I just said, is encouraging |
| We are already making good progress in driving operational efficiency, boosting capital efficiency, and outperforming our revenue growth target |
| So, the performance and the growth opportunities we seized in the first half of this year strengthen our confidence in the path towards our 2025 targets and our Global Hausbank strategy |
| Starting with the Corporate Bank; we delivered 30% revenue growth with strong momentum across all business areas |
| We had a far better forecast what is happening |
| Stable asset management and very robust IB was growing O&A revenues |
| In the Investment Bank; we demonstrated the stability of our Financing business and resilience of our FIC franchise overall, after the exceptionally strong levels of the same period of last year and we are further diversifying our Investment Bank by strengthening our O&A business, both organically and inorganically |
| So looking at their own resilience and the way we have risk managed that, I'm confident that, obviously, our portfolio is in good health |
| And if I then look at the businesses we are creating, again in the non-NII, but also actually what we always emphasize here that the real uptick in NII in the private bank is only coming in '24 and '25, honestly, I'm very bullish on the revenue trajectory for '24 and '25 |
| These are the best six month revenues since the formation of the Private Bank, with double-digit year-on-year growth in both the first and second quarters of the year |
| And we saw we are making good progress |
| You just heard from James, how committed we are on the cost line and hence to further increase the operating leverage, we have full confidence in delivering the €8 billion |
| The cost/income ratio improved to 59% and post-tax return on tangible equity was 14.8%, despite higher non-recurring costs |
| That enabled us to grow assets under management by €38 billion euros, to €859 billion in the first half year and these businesses are strongly complementary, which drives sustained revenue growth as we show on slide three |
| Over the past two years, we have seen steady growth in first-half revenues |
| Statement |
|---|
| We generated a profit before tax of €1.4 billion, down 9% year-on-year, mainly due to the higher non-operating items |
| And secondly, yes, I think in particular, in Europe but also in Germany, you see that mid-cap companies, family-owned companies that you see a softening in loan growth and the reduction in demand for the time being, in particular, when it comes to long-term investments |
| This was predominantly driven by higher funding charges in the segment and a decline in management fees from a reduction in average assets under management |
| Profit before tax of €103 million in the quarter was down 34% compared to the prior year |
| This reduction reflected overall lower demand and continued selective balance sheet deployment in our Trade Finance & Lending business as well as the negative impact from FX movements |
| Revenues for the second quarter were 11% lower year-on-year |
| Excluding these markdowns, the business underperformed in a challenging market, with the global fee pool down approximately 20% year-on-year |
| Revenues declined by 6% versus the prior year |
| Rates and Foreign Exchange revenues were significantly lower compared to a very strong prior year quarter and reflected a more normalized market environment than the prior year period |
| Advisory revenues were significantly lower reflecting both lower fee pool and relative underperformance |
| Provision for credit losses is now expected at the upper end of our guidance range of 25 basis points to 30 basis points of average loans, reflecting the current macro backdrop and lower loan balances than initially anticipated |
| We always said that 2023 will be based on a very weak economy, on a kind of a no-growth scenario |
| I just want to say one other thing, while we're on the costs, this nonoperating cost area for us, obviously, frustrating to have those exceed, especially those out of our control original planning |
| Flows in cash products once again have been significant and very volatile throughout the quarter ending with net outflows of €1 billion |
| I think there's an element that the banking industry had a long time of negative and is seeking to recover some of that sort of lost structural profitability |
| in terms of our business operations, potentially competitive positioning, given that, in our view, European banks have been at a capital disadvantage for some time |
| Overall, there are currently no signs of a persistent deterioration in the environment; however, we observed softening in some German midcap sectors, including Automotive, and continued weakness in Commercial Real Estate |
| The significant sequential decline reflects a non-recurrence of certain idiosyncratic events in the International Private Bank in the first quarter |
| Loan volume in the Corporate Bank was €116 billion, down by €13 billion compared to the prior year quarter and €5 billion compared to the previous quarter |
| Other revenues declined due to higher funding charges and lower mark-to-market valuations of co-investments, partly offset by net interest income on excess cash from rising interest rates |
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