In the third quarter, Deutsche Bank reports a profit, surpassing expectations.

• In the second quarter, Germany's largest lender reported a 143-million-euro loss and announced it would not participate in a second share buyback program this year, while also setting aside funds for a provision related to its ongoing lawsuit regarding the acquisition of its Postbank division.
• In August, 60% of plaintiffs in the litigation against Deutsche Bank, who claimed they were underpaid for their purchase, have settled with the German bank.
• By 2025, Deutsche Bank aims to reduce its workforce by 3,500 roles through a cost-cutting initiative, which includes the 800 layoffs announced in the previous year.

Deutsche Bank reported a profit in the three months to September, exceeding expectations, after ending its 15-quarter profit streak in the second quarter.

The net profit attributable to shareholders for the third quarter was 1.461 billion euros ($1.58 billion), exceeding the 1.047 billion euros forecasted in a LSEG poll of analysts.

Despite LSEG analysts predicting revenue of 7.338 billion euros, the actual revenue came in at 7.5 billion euros.

Other third-quarter highlights included:

• Profit before tax of 2.26 billion euros, up 31% year-on-year.
• The provision for credit losses increased by 250 million euros in the same quarter compared to the previous year.
• The capital ratio of banks, a measure of their solvency, increased from 13.5% to 13.8% in the third quarter.

• The return on tangible equity increased to 10.2% (or 7.6% after adjusting for litigation provisions), compared to a 7.3% increase from the previous year.

Deutsche Bank, Germany's largest lender, reported a 143-million-euro loss in the second quarter and announced it would not participate in a second share buyback program this year. Additionally, the bank set aside provisions for its ongoing lawsuit over its acquisition of Postbank, with 60% of plaintiffs settling with the bank in August.

Deutsche Bank's profit was boosted in the third quarter due to the release of 440 million euros of litigation provisions, and the lender has now announced that it has applied for a share repurchase, a step that was previously stalled by the Postbank legal proceedings.

European lenders have strengthened their performance through stock buybacks and dividends, but now face pressure to maintain earnings growth in line with U.S. peers as interest rates decline, following the European Central Bank's summer monetary policy loosening.

According to McKinsey's Global Banking Annual Review 2024, analysts warned that banks need to cut costs 2.5 times faster than revenue declines in order to maintain current ROTE margins, despite the industry's efforts to reduce costs and maintain credit quality.

By 2025, Deutsche Bank aims to reduce its workforce by 3,500 roles through a cost-cutting initiative, which includes the 800 layoffs announced in the previous year.

After Deutsche Bank withdrew from the possibility of a long-awaited merger with Commerzbank, which is now being considered for acquisition by Italy's Unicredit, market participants are closely monitoring the broader banking sector.

In the coming days, other European banks, including Barclays on Thursday and UBS next week, will post their third-quarter earnings.

This breaking news story is being updated.