Deutsche Bank said second-quarter revenue dropped at its prime finance unit, extending a slump beyond businesses that the lender is seeking to exit as client concerns added to volatile markets.
Bloomberg News reports that the prime finance division, which caters to hedge funds, booked a drop in revenue in the second quarter, driven by lower “customer balances, lower client activity levels and market uncertainty,” the bank said in its earnings presentation Wednesday. The business sits within its equity sales and trading unit, which posted a 31% decline in second-quarter revenue to $791m.
The bank has been investing in prime brokerage as it allows the firm to win fees for other follow-on services and encourages trading with the bank. While Deutsche Bank said in April that clients were reassured about its worthiness as a counterparty, continued questions about the firm’s capital eroded that confidence last quarter.
“Doubts were raised about our financial strength,” CEO John Cryan wrote in a letter to employees posted Wednesday on the bank’s website. “These were unjustified, but they unsettled some clients and that made our day-to-day work more difficult.”
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