(Bloomberg) -- Deutsche Bank AG's trading unit hit a record in the first quarter as the lender benefited from market volatility.
The fixed income and currencies business recorded a 17% revenue jump to €2.9 billion ($3.3 billion) in the three months through March, Deutsche Bank said on Tuesday. The result exceeded the average 5% increase across Wall Street and was the highest for the German lender since at least 2013, according to data compiled by Bloomberg.
It's the latest set of bank earnings showing how traders have made big profits on the market volatility set off by the Trump administration. At the same time, the uncertainty has prompted companies around the globe to slow investment including acquisitions in a potential hit to banks' bottom lines.
Chief Financial Officer James von Moltke said on Bloomberg TV that some deals-dependent business units slowed "dramatically" in April, though he highlighted a strong pipeline. Revenue from advising on mergers as well as equity and debt issuance - an area where Deutsche Bank has invested heavily - dropped 8% in the first quarter.
Fixed-income trading was hit in the first two weeks of April and only returned to a "healthy" performance after that, the CFO said.
Asked about investor payouts, von Moltke said the lender would "reassess" that after the second quarter. The firm said it will also update investors on its strategy around that time.
Deutsche Bank's shares were up 3.5% at 13:32 p.m.
The first-quarter results "put us on track for delivery on all our 2025 targets," Chief Executive Officer Christian Sewing said in the earnings statement.
Net income attributable to shareholders rose to €1.8 billion in the first quarter, the bank said in the statement.
The economic outlook "remains uncertain" given the turmoil in April, the bank said in the statement. It has reviewed its credit portfolios in preparation for potential impacts to vulnerable clients and decided to add a "dedicated tariff overlay" to its credit provisions, it said.
In the first quarter, Deutsche Bank put aside a €471 million to cover for bad loans, including €70 million earmarked to shield against the impacts of tariffs on clients and a generally weaker macro backdrop.
RBC analyst Anke Reingen described the results as "strong," but she also noted that "the impact of tariffs adds uncertainty."
The geopolitical and trade tensions "will likely impact the world economy" and could lead to "a substantial reordering of trade corridors and supply chains," Sewing said on a call with analysts.
However, "we are particularly encouraged to see what is happening in our domestic market with regard to fiscal changes and structural reforms, leading to a much-needed economic boost for Germany and Europe," he said.
--With assistance from Macarena Muñoz.
(Adds CEO comments from analyst call in last two paragraphs.)
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