German giant Deutsche Bank on Thursday reported its first annual profit in six years, driven by solid returns from its investment banking division, the one-time problem child of the business.
Annual net profit for 2020 hit €113 million, while net profit amounted to €51 million for the fourth quarter of the year.
Nevertheless, the bank pledged up to €1.8 billion in provisions in 2020 to address the possibility of loan losses—over 2.5 times more than in 2019 due to the coronavirus pandemic.
Net revenues of its investment bank grew by 32% to €9.3 billion during the year. The earnings before tax for the division rose to €3.2 billion, six times that of 2019.
Appreciating the results, Deutsche Bank CEO Christian Sewing said, "In the most important year of our transformation, we were able to more than offset transformation-related effects and elevated credit provisions despite the global pandemic."
The bank lost €5.72 billion in 2019, its fifth straight net loss, and unveiled a new turnaround programme in July.
One of the worst years came in 2016, when it lost €6.8 billion, mostly due to the operations of its investment bank in the years around the financial crisis.
As a result, the investment bank was severely impacted by Sewing's restructuring programme, in which around one-fifth of the group's overall workers had to leave by 2022.
After the gains booked in 2020, Sewing said that he anticipated the positive momentum carry through into 2021.
"We have built firm foundations for sustainable profitability and are confident that this overall positive trend will continue in 2021 despite these challenging times," he said.