Deutsche Bank cut its revenue target this morning following the collapse of merger talks with German rival Commerzbank.
The bank said it expected revenue to be flat this year as it reported that revenue in the first quarter was down nine per cent year-on-year to €6.4bn.
Read more: Deutsche Bank and Commerzbank merger talks collapse
The drop was driven by falling revenue in the firms corporate and investment bank, fixed income sales and trading, and equity sales and trading arms.
The banking giant reported that net income was up 67 per cent to €201m, however, profit before tax dropped 32 per cent from €432m to €292m.
Deutsche Bank revealed yesterday that it had abandoned talks with Commerzbank over a potential merger, which would have created the Eurozones second largest lender, as there were too many risks attached to the deal.
The bank said the merger did not offer enough benefits to the the offset risks, restructuring costs and capital requirements attached to the deal.
The German Government, which owns a 15 per cent stake in Deutsche Bank, had backed the deal to create a national banking champion after becoming concerned over the health of both institutions.
Michael Hewson, chief market analyst at CMC Markets, said the bank is “fighting a losing battle to turn itself around”.
“Quite simply the problems facing Deutsche are still too large to make it a compelling takeover partner, let alone a merger partner,” he said.
CityAM
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