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Deutsche Bank Falls; Trading Income Takes a Hit

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By Dhirendra Tripathi

Investing.com – Deutsche Bank (DE:DBKGn) stock (NYSE:DB) fell 5.5% on Nasdaq in Wednesday’s premarket trading as revenue from trading in fixed income securities and currencies fell 12% in the third quarter.

Revenue from fixed income business has fallen at other global banks too after last year’s boom but it exposed once more the vulnerability of the German lender, dependent on the business for more than a quarter of its revenue.

The fall in fixed income trading revenue at Deutsche compares with an average decline of 13% at the five biggest U.S. investment banks, according to Bloomberg.

Chief Executive Officer Christian Sewing, tasked with turning around the bank more than 3 years ago, has relied on strong growth in fixed income so far to achieve the objective.

Fee revenue from advising on deals and fund-raising activities rose 22% as capital markets boomed and corporates went for M&As and restructuring. However, it remained a bystander to the boom in equities trading at its Wall Street rivals, having quit the business two years ago.

Revenue growth at corporate banking was mostly flat while it fell in the retail division.

Spain’s Banco Santander (NYSE:SAN) also fell on Wednesday, declining 2%, even as it said it would “significantly” beat its profit target for this year. Growth at rival lenders UBS (NYSE:UBS) and Barclays (NYSE:BCS) had fuelled optimism about the sector and bank share prices had recently gained.

Net revenue in the third quarter rose 2% to 6 billion euro (around $7 billion) and group net income was higher by 6% to 329 million euros.

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