In what Deutsche Bank called a “record full year,” its private clients and asset management division posted EUR2.5 billion of income before income taxes on Thursday.
Those results include EUR1.8 billion of income before income taxes for the private and business clients unit. That group’s results came with a half-billion euro loss tied to Greek government bonds and a one-time EUR0.3 billion credit from the firm’s stake in Hua Xia Bank. The Greek bonds and lower revenue from investment products hit the asset management and private wealth management businesses in the fourth quarter, the firm said.
Deutsche’s asset and wealth management business contributed EUR767 million of income before income taxes. That performance came as the firm said it saw positive results from its integration with Sal. Oppenheim and efforts to enhance efficiency.
Full year net revenue for the private clients and asset management business came in at EUR33.2 billion, a 16% or EUR4.7 billion increase from last year. Deutsche Bank credited that rise to revenue from businesses like Postbank and Sal. Oppenheim that it acquired last year.
Meanwhile, fourth quarter net revenue for Deutsche’s private clients and asset management business came in at EUR3.5 billion, a 22% increase from the EUR2.8 billion that unit had in the fourth quarter of 2010. That increase came as the firm was able to count Postbank’s revenue for the full quarter for the first time.
The asset and wealth management division posted EUR3.8 billion in net revenue for the year, a 2% or EUR88 million increase from 2010. For the fourth quarter of 2011, that division saw EUR909 million in net revenue, a decrease of 10% or EUR101 million from the fourth quarter of 2010.
Revenue for the private wealth management business within that division increased by EUR51 million for the full year in 2011, while its quarterly revenue decreased by EUR95 million compared to the fourth quarter of 2010. That fourth quarter decrease was due to one-time items from Sal. Oppenheim that boosted revenue in the fourth quarter of last year, the firm said. Private wealth management’s revenue from its advisory and brokerage businesses and credit products was the same when compared to the previous year.
Full-year, non-interest expenses at private wealth management fell by EUR344 million in 2011 as a result of Sal. Oppenheim’s integration. Its fourth quarter non-interest expenses also fell in the fourth quarter by EUR164 million. The unit’s invested assets decreased by EUR7 billion for the year, due to market depreciation that was partly offset by new assets. Its invested assets climbed by EUR5 billion in the fourth quarter, which the firm attributed mostly to movement in foreign currencies.
Deutsche’s private and business clients division saw its 2011 net revenue rise to EUR10.6 billion, up 73% or EUR4.5 billion from 2010. That boost came mostly from the Postbank’s consolidation, according to the firm, which contributed EUR4.2 billion to that increase.
Fourth quarter net revenue for the private and business clients division also rose to EUR2.6 billion in the fourth quarter, a 40% or EUR731 million increase from the fourth quarter of 2010. That came as Postbank’s consolidation put in EUR720 million toward the revenue increase in the fourth quarter.
The private and business clients division’s revenue from its advisory and brokerage businesses fell by EUR25 million or 11% compared to the fourth quarter of 2010. That decline came primarily from the advisory banking business in Germany, the firm said. The private and business clients business posted a EUR311 million provision for credit losses in the fourth quarter, including EUR178 million tied to Postbank. Non-interest expenses rose to EUR2 billion in the fourth quarter, up 46% or by EUR629 million from the fourth quarter of 2010.
Fourth quarter invested assets at the private and business clients unit did not change from the last quarter at EUR304 billion. That business’s total number of clients came in at 28.6 million, including 14.1 million from Postbank.
Lorie Konish writes for On Wall Street.