British multinational universal bank Barclays and Deutsche Bank’s profits surge, as a result of income from higher interest rates, the banks announced on Thursday.
Barclays’s shares increased by four percent, being the top performer in Europe’s benchmark banking index, while Deutsche Bank’s shares increased by 2.6 percent.
The promising shared numbers follow the collapse of U.S. banks, and the rescue of Credit Suisse, which is further fuelling turmoil in the banking sector, forcing governments and central banks to intervene to soften the blow of the crisis.
Deutsche Bank’s 2019 turnabout plans is showing its effectiveness, as Germany’s biggest bank’s profit peaked, after going through a rough patch.
First-quarter net profit rose eight percent to $1.4 billion, profit before tax jumped 12 percent on the previous year to $2.1 billion, the highest quarterly profit since 2013, Deutsche bank announced.
“In the first quarter, we again proved the strength and resilience of Deutsche Bank in challenging conditions,” chief financial officer of Deutsche bank, James von Moltke said.
Christian Sewing, Deutsche bank’s CEO added “the results demonstrate the relevance of the bank’s strategy and underscore that it is well on track to meeting its cost, revenue and returns targets for 2025.”
Deutsche Bank is planning layoffs in management layers and will be enforcing strict limitations on hiring in non-client facing areas, with the layoffs expected to affect 800 employees.
Barclays’s profits also increased by 27 percent, reaching $2.2 billion in the first quarter and exceeding previous estimates of it to reach $498 million, while Barclays UK’s profit increased by 30 percent, reaching $641.7 million, boosted by interest rate increase.
