FRANKFURT (Reuters) - Deutsche Bank more than doubled its first-quarter net profit to 575 million euros ($627 million), benefiting from lower legal costs for past misdeeds and a rebound in debt trading.
Germany's flagship lender beat expectations of analysts who had expected the bank to post a first-quarter net profit of 522 million euros.
"Client engagement is strong, asset flows are returning across the bank and activity is picking up. Our cost-cutting efforts are starting to pay off, while we have reduced complexity significantly," Chief Executive John Cryan said in a statement on Thursday.
The bank's litigation reserves decreased to 3.2 billion euros in the quarter, after it had booked record fourth-quarter sums for settlements such as over the sale of toxic mortgages and sham Russian trades.
Provisions for possible future legal action were flat at 2.4 billion euros.
Earlier this month, the U.S. Federal Reserve fined Deutsche Bank $157 million for violating foreign exchange rules and running afoul of the so-called Volcker Rule on speculative investments, leaving a probe into sanctions violations as the only large remaining litigation issue.
Revenues at Deutsche Bank's cash-cow bond-trading division were up 11 percent in the quarter as it benefited from a surge in trading across interest rate products, commodities and foreign exchange (FICC), while sales were down 10 percent in equity trading.
Total revenues were down 9 percent at 7.3 billion euros in the quarter.
The bank's core tier 1 equity ratio rose to 14.1 percent from 10.7 percent a year earlier, strengthened by an $8.5 billion cash call earlier this month.
($1 = 0.9169 euros)
(Reporting by Arno Schuetze; Editing by Maria Sheahan and Georgina Prodhan)
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