Deutsche Bank's Latest Balance Sheet Just Made A Laughing-Stock Of The Bears


Deutsche Bank reported its second quarter earnings today and markets seem to like the latest disclosure thus far, given that Deutsche Bank shares are rising in Germany.

The key take-aways are that 1) the company reported $1.2 billion euros vs. $1.1 billion euros in the year-ago quarter, 2) the company’s tier 1 ratio rose to 11.3% from 11.2% year-over-year, indicating a stronger balance sheet position which continues to be in excess of the company’s 10% target. (Tier 1 ratios are basically a bank’s equity capital as a percentage of its ‘risk-weighted assets’, RWA, whereby RWA is the sum of all loan assets, each weighted according to each loan’s riskiness)


The third key take-away is that they provided detail about the bank’s exposure to sovereign debt:


Return on equity (ROE) lower, but this is a function of the firm's strengthening balance sheet

Revenue still decent

Income before taxes higher year over year, first half of 2010 looking good

Corporate banking & securities (CB&S), global transaction banking (GTB), and private & business clients (PBC) driving earnings

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.