Global Transaction Banking Corporate Division (GTB)

 

Three months ended

 

 

Nine months ended

 

 

in € m.
(unless stated otherwise)

Sep 30, 2014

Sep 30, 2013

Absolute Change

Change
in %

Sep 30, 2014

Sep 30, 2013

Absolute Change

Change
in %

N/M – Not meaningful

Net revenues:

 

 

 

 

 

 

 

 

Transaction services

1,039

1,023

15

2

3,101

3,093

8

0

Total net revenues

1,039

1,023

15

2

3,101

3,093

8

0

Provision for credit losses

43

58

(15)

(25)

114

230

(115)

(50)

Total noninterest expenses

657

586

71

12

2,053

1,842

211

11

Thereof:

 

 

 

 

 

 

 

 

Restructuring activities

(1)

4

(5)

N/M

8

18

(10)

(58)

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

338

380

(41)

(11)

934

1,021

(88)

(9)

2014 to 2013 Three Months Comparison

The market environment for GTB became more challenging in the third quarter 2014 with further cuts to already low interest rates and heightened geopolitical risks, whilst at the same time the business environment remained highly competitive.

In this environment, GTB’s net revenues increased by € 15 million, or 2 %, compared to the third quarter 2013. Revenues in Trade Finance benefited from growing volumes in Europe and Asia Pacific as well as stabilizing margins. In Securities Services, revenues increased due to strong volume growth. In Cash Management, the impact from the ongoing low interest rate environment was more than compensated by increased business activity.

Provision for credit losses of € 43 million in the third quarter 2014 decreased by € 15 million compared to the third quarter 2013, which is attributable to small movements in Trade Finance.

Noninterest expenses increased by € 71 million, or 12 %, compared to the prior year quarter. The increase was primarily driven by higher expenses to comply with regulatory requirements as well as increased revenue-related expenses. Furthermore, investments to enable business growth contributed to the higher cost base. The third quarter 2014 included cost-to-achieve related to the OpEx program of € 23 million versus € 18 million in the third quarter 2013.

Income before income taxes decreased by € 41 million, or 11 %, compared to the third quarter 2013 due to noninterest expenses outgrowing revenues under the difficult market conditions.

2014 to 2013 Nine Months Comparison

The market conditions in the first nine months 2014 continued to be challenging with ongoing low interest rates, a highly competitive environment and geopolitical risks in some GTB markets. The first nine months 2014 included a litigation-related charge.

Net revenues remained stable compared to the prior year period. The first nine 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. In Trade Finance, revenues increased based on growing volumes and stabilizing margins especially in Europe and Asia Pacific. Revenues in Securities Services benefited from strong volumes. Cash Management developed solidly in an ongoing low interest rate environment.

Provision for credit losses was € 114 million in the first nine months 2014, compared to € 230 million in the first nine months 2013. The decrease is primarily attributable to the non-recurrence of a single client credit event that occurred in Trade Finance in 2013.

Noninterest expenses increased by € 211 million, or 11 %, compared to the prior year period. As mentioned before, the first nine months 2014 included a litigation-related charge. The remaining increase reflects higher expenses to comply with regulatory requirements and investments to enable business growth. Cost-to-achieve related to the OpEx program increased by € 26 million versus 2013.

Income before income taxes decreased by € 88 million, or 9 %, compared to the first nine months 2013 due to a litigation-related charge and higher noninterest expenses more than offsetting lower provision for credit losses.