The wealth and asset management arm of Deutsche Bank, Germany’s largest bank, logged net revenues in the first quarter of €1.1 billion ($1.52 billion), a drop of 14 per cent from the year before, mainly because of market movements that affected policyholder positions.

The wealth and asset management arm of Deutsche Bank, Germany’s largest bank, logged net revenues in the first quarter of €1.1 billion ($1.52 billion), a drop of 14 per cent from the year before, mainly because of market movements that affected policyholder positions.

More positively, management fees and other recurring revenues increased by €18 million, or 3 per cent, due to an increase of the average assets under management for the quarter following the positive market effect and a favorable shift in product mix from growth in alternatives [asset classes] and private clients, the bank said today in a statement.

Income before income taxes stood at €169 million in the first quarter, a fall of €50 million, or 23 per cent, compared to a year ago. This reflects increased CtA [commodity trading advisor] activity related to its Operational Excellence Program, or OpEx, and lower revenue due to reduced performance and transactions fees and other non-recurring items, the bank said.

In the first quarter, invested assets increased by €11 billion to €934 billion due to positive market effects and inflows, it said.

Performance and transaction fees and other non recurring revenues fell by €23 million, 11 per cent, driven by lower transaction revenues particularly foreign exchange products around private clients.

Other product revenues decreased compared to Q1 2013 by €27 million, or 29 per cent, mainly due to an impairment loss on existing disposal groups held for sale and reduced net gains on fair value changes.

Net interest income increased by €15 million, or 11 per cent, due to increased lending volume and improved lending margins in the first quarter of 2014. Mark-to-market movements on policyholder positions in Abbey Life decreased by €159 million, or 76 per cent, from the same quarter a year earlier.

“In the current operating environment DeAWM continued to benefit from the rise of equity markets as seen in the increase of assets under management in 1Q2014. Market conditions remain susceptible to volatility resulting in lower client activity and lower revenue on trading, additionally the low interest rate environment continues to challenge deposit revenue margins,” the bank said.

“DeAWM sees continued progression in the growth of its credit loan portfolio, with revenues and margins increasing and credit losses remaining comparatively low. DeAWM’s initiative to improve its operating and technology platform continues to deliver cost efficiencies,” it added.

Group

Across the bank as a whole, it sustained a 30 per cent year-on-year fall in income before taxes, standing at €1.7 billion.

Core bank IBIT, which excludes the Non-Core Operations Unit, declined 17 per cent to €2.2 billion; net revenues of €8.4 billion fell 11 per cent year over year, largely due to a decline in corporate banking and securities results.