Deutsche Bank net profit up 93% in FY15 from India ops

German lender in news for resignation of its India-born co-chief executive Anshu Jain

Deutsche Bank on Thursday reported 93 per cent growth in net profit to Rs 1,406 crore in the financial year 2014-15 from its India operations, mainly aided by higher revenues from treasury,  wealth management, and transaction banking operations. A tight control on costs also helped the lender achieve higher profit.

The German lender, in the news for the resignation of its India-born co-Chief Executive Anshu Jain, had reported a post-tax net profit of Rs 729 crore in the year-ago period.

The foreign lender, which has 17 branches in India, saw 45 per cent increase in revenues to Rs 3,925 crore during the period under review. While transaction banking and wealth management operations contributed 43 per cent of the revenues, 33 per cent was contributed by treasury operations due to softening on bond yields due to interest rate cut expectations. Income from retail operations contributed nine per cent to the total revenues.

“Our strong financial performance underscores the ability of our businesses to harness a dynamic business environment on the back of deeply embedded client relationships, high-quality internal talent and rich product diversity,” said Ravneet Gill, Deutsche Bank’s chief executive officer for its India operations.

The bank’s cost-to-income ratio improved to 35 per cent as of March 31, 2015, from 47 per cent in the previous year due to tight control of cost and healthy growth in revenues.

“Deutsche Bank's sustained strategic focus on India has played a big role too. Also, the bank’s tight cost-to-income ratio and low net NPA (non-performing asset) ratio of 0.13 per cent points to the excellent cost and risk culture within the organisation,” he added.

 

Though net NPA stayed under control, it rose marginally by four basis points over the previous year. According to a bank official, the lender’s restructured asset portfolio is not very significant.

The bank’s total balance sheet size increased by seven per cent to Rs 61,597 crore as of March 31. Growth in advances was 25 per cent to Rs 36,138 crore, which is much higher than the banking industry's growth of 12.6 per cent. As much as 85 per cent of the loan book consisted of corporate while the remaining 15 per cent was in retail.

On the liabilities side, the lender saw deposits growing by 48 per cent compared with an industry average of 12.8 per cent, mainly due to high growth in term deposits. The share of low-cost deposits, that is, current and savings account (Casa) deposit, in total deposit was at 46 per cent.

Deutsche Bank’s capital base in India was Rs 9,453 crore as of March 31, following a Rs 552-crore capital infusion by its parent in FY15. Its capital adequacy ratio stood at 15.62 per cent, compared with the regulatory requirement of nine per cent.