Deutsche Bank posted a 10 percent drop in revenue in the third quarter, reflecting a weak market and the effects of a major restructuring. But as Silvia Antonioli reports, cost cuts at Germany's flagship lender have helped lift profit above analysts' expectations.
Work is still in progress at Deutsche Bank Shares in Germany's biggest lender fell after it posted a 10 percent drop in third-quarter revenue. The banks is struggling with the effects of a major restructuring which follows bitter legal battles and huge fines related to scandals including rate rigging and money laundering. (SOUNDBITE) (English) World First, Chief Economist, Jeremy Cook: "One thing we all have to realize is that restructuring a company as large and as complicated as Deutsche Bank is not an overnight exercise and this will continue to take quarter after quarter of slowing revenues and increased costs as a result." The silver lining is that cost cutting helped to lift profit above analysts' expectations. But Deutsche's market share in global investment banking has shrunk with revenue from its cash-cow bond-trading division down by more than a third. This is well below an average 22 percent fall posted by U.S. peers. And the broader trading environment is not helping. (SOUNDBITE) (English) World First, Chief Economist, Jeremy Cook: "The macro business across European banks and to be honest across most banks out there at the moment is you know is down. You looking effects of fixed income you looking at currencies you're looking at you're looking at credit you're looking at commodities. All of these are starting to start to really retrench." Indeed Deutsche Bank can take comfort from the fact that it's not alone. Results from Barclays and Santander show that other European banks are struggling too.