Although Deutsche Bank topped estimates by posting third quarter net profits of $672.2m last week, trading revenues were up only 4% on a year ago and declined 39% on the second quarter.
As The Wall Street Journal points out, although most US firms saw a fall-off in third quarter trading revenues as the shine came off the bond markets, Deutsche appears to have suffered by far the most. And the bank can't even blame one-off 'botched' trades. It seems that the relatively poor trading revenues are down to the fact that a climbing Euro depressed the value of its dollar-denominated trading income and the bank lost money on hedges against bad loans and the value of its industrial portfolio.
The latest figures also reveal that the German powerhouse relies heavily on its global markets business to bring home the bacon. CEO Josef Ackermann has acknowledged that the challenge remains to ensure that the bank's trading revenues remain consistently good and are sustainable whatever the market is doing. Ackermann did say, however, that the year's performance overall will be 'very satisfying to our shareholders'.