BERLIN – Deutsche Bank AG posted a 29 percent drop in second-quarter net profit Tuesday, hit by what it described as higher taxes, declining revenue and political instability affecting the markets.
Germany's largest bank said its net profit in the April-June period fell to 238 million euros ($320 million), down from 335 million euros in the comparable period in 2013.
In its financial statement, the Frankfurt-based bank said the results came from 7.86 billion euros in quarterly revenue, a 4 percent decline from 8.215 billion euros from a year ago.
Despite the drop in profit, co-chief executives Juergen Fitschen and Anshu Jain described the quarter as having a "strong underlying performance" with pre-tax profits up 16 percent from a year ago and core businesses such as corporate banking and securities delivering strong revenues and growing profits.
"Nonetheless, our environment is complex. The world's economies are growing at different speeds, and this may cause differences in the pace at which interest rates normalize, creating opportunities," they said in a joint statement. "However, emerging geopolitical events in Ukraine and the Middle East may impact financial markets and our clients, and we continue to adapt to a fast changing regulatory framework."
The bank said that quarterly adjustments and non-tax deductible expenses caused it to pay a 73 percent tax ratio for the quarter, up from a 50 percent ratio in the comparable period last year.
A year ago, the bank's second-quarter net profit also fell significantly — by half — because of lawsuit expenses and higher taxes. Deutsche Bank had been facing a number of legal challenges, including lawsuits related to U.S. mortgage bonds and a scandal over rigging of a key interest rate benchmark by several banks.
Deutsche Bank shares were up more than 1 percent after the market opened in Frankfurt and trading around 27 euros.