Deutsche Bank has posted a surprise net profit for the first quarter, beating analyst expectations by almost half a billion euros. Ivor Bennett reports on what has been an unpredictable results season, with profits at Lloyds raising the prospect of another share sale.
Standard Chartered isn't the only bank capable of springing a surprise. A net profit at Germany's Deutsche Bank the market equivalent of pulling a rabbit from a hat. Investors were braced for a 250 million euro loss. But income ended up coming in almost half a billion euros higher. That's still lower than last year though - by over 50 percent. Rock bottom interest rates, low commodity prices and worries over China giving the bank's investment arm a very rough ride. SOUNDBITE (English) IG, SENIOR MARKET ANALYST, CHRIS BEAUCHAMP, SAYING: "I think we could continue to see that kind of performance repeated. Nonetheless the shares have run with it. So maybe there's a sense that a lot of the badness is in the price. The new CEO continuing moving forward, trying to repair the bank's situation, much like we had with Standard Chartered earlier in the week." Like much of the sector, Deutsche Bank is in the middle of a massive restructuring. One of several scars left by the financial crisis. The pressure to clear up non-performing loans and raise capital ratios has put banks in a better position. But the current climate isn't helping. SOUNDBITE (English) IHS GLOBAL INSIGHT, DIRECTOR OF SOVEREIGN RISK ANALYSIS, JAN RANDOLPH, SAYING: "Most banks still make money out of the yield curve. Borrowing short and lending at a higher yield. The fact is that yield curves, particularly at the sovereign level, are pretty flat. And negative rates doesn't really help that. So they're in a bind." Once again though there are surprises. Lloyds saw its net interest margin rise to nearly 3 percent in the first quarter. Helping it to underlying pre-tax profits of 2.1 billion pounds. Slightly down on last year, but still enough to raise the prospect of a government share sale later this year.