Global Transaction Banking Corporate Division (GTB)

 

Three months ended

 

 

Six months ended

 

 

in € m.
(unless stated otherwise)

Jun 30, 2014

Jun 30, 2013

Absolute Change

Change in %

Jun 30, 2014

Jun 30, 2013

Absolute Change

Change in %

N/M – Not meaningful

Net revenues:

 

 

 

 

 

 

 

 

Transaction services

1,035

1,036

(1)

0

2,062

2,070

(8)

0

Total net revenues

1,035

1,036

(1)

0

2,062

2,070

(8)

0

Provision for credit losses

47

79

(32)

(41)

71

172

(101)

(59)

Total noninterest expenses

759

633

126

20

1,396

1,256

140

11

Thereof:

 

 

 

 

 

 

 

 

Restructuring activities

6

12

(5)

(46)

9

14

(5)

(36)

Impairment of intangible assets

0

0

0

N/M

0

0

0

N/M

Noncontrolling interests

0

0

0

N/M

0

0

0

N/M

Income before income taxes

228

324

(95)

(29)

595

642

(46)

(7)

2014 to 2013 Three Months Comparison

In the second quarter 2014, the challenging conditions in some GTB markets persisted with ongoing low interest rates, a highly competitive environment as well as difficult geopolitical circumstances. Income before income taxes was significantly impacted by a litigation-related charge.

In this environment, GTB’s net revenues showed a high resiliency and were stable compared to the prior year quarter. The second quarter 2013 included a gain from the sale of Deutsche Card Services. In Trade Finance as well as Trust & Securities Services, revenues increased due to strong volume growth. Revenues in Cash Management developed solidly in the aforementioned low interest rate environment.

Provision for credit losses was € 47 million in the second quarter 2014, compared to € 79 million in the second quarter 2013. The decrease is attributable to the non-recurrence of a single client credit event in Trade Finance that occurred in 2013.

Noninterest expenses increased by € 126 million, or 20 %, compared to the prior year quarter. This was primarily due to a litigation-related charge. Furthermore, investments in platforms to enable business growth and higher expenses to comply with regulatory requirements contributed to the increase. The second quarter 2014 included cost-to-achieve related to the OpEx program of € 32 million versus € 23 million in the second quarter 2013.

Income before income taxes decreased by € 95 million, or 29 %, compared to the second quarter 2013 due to a litigation-related charge.

2014 to 2013 Six Months Comparison

As mentioned above, the market environment remained challenging in the first six months 2014 with low interest rates, a competitive environment and difficult geopolitical conditions in some GTB markets. The first six months 2014 included a litigation-related charge.

Compared to the prior year period, net revenues decreased only marginally by € 8 million. The first six months 2014 included a gain on the sale of registrar services GmbH, while in the prior year period a gain from the sale of Deutsche Card Services was recorded. Revenues in Trade Finance benefitted from growing volumes. In Trust & Securities Services, revenues showed a solid development supported by strong volumes. Cash Management increasingly came under pressure, suffering from ongoing low interest rates.

Provision for credit losses was € 71 million in the first six months 2014, compared to € 172 million in the first six months 2013. The decrease is primarily attributable to the non-recurrence of a single client credit event in Trade Finance that occurred in 2013.

Noninterest expenses increased by € 140 million, or 11 %, compared to the prior year period. As mentioned above, the increase reflects a litigation related charge, investments in platforms to enable business growth as well as increased expenses to comply with regulatory requirements. Cost-to-achieve related to the OpEx program increased by € 21 million versus 2013.

Income before income taxes decreased by € 46 million, or 7 %, compared to the first six months 2013 due to a litigation-related charge more than offsetting lower provision for credit losses.