FRANKFURT–Deutsche Bank, the largest German bank, said on Thursday that profit had fallen 34 percent in the first quarter, more than expected, as the European debt crisis continued to depress fees from trading and other investment banking activities.
Net profit fell to 1.4 billion euros ($1.85 billion) in the first three months of the year compared with net profit of 2.1 billion euros in the period a year earlier, the bank said.
The decline in earnings, which also reflected an expense of 210 million euros related to lawsuits against the bank, comes shortly before a change in top management. Josef Ackermann, chief executive for a decade, is retiring at the end of May. Anshu Jain, head of the investment bank, and Jürgen Fitschen, another member of the management board, will share chief executive duties.
“Against a background of continued caution in global financial markets, we delivered solid results,” Mr. Ackermann said in a news release.
Like most of its peers, Deutsche Bank is earning lower commissions from trading of stocks, bonds and derivatives because turmoil and uncertainty caused by the European debt crisis are making customers less active in financial markets.
Under pressure from regulators, Deutsche Bank is also cutting back on riskier businesses, which should make it more resilient but will probably weigh on profit. Deutsche Bank said it was on track to increase the amount of capital held in reserve and meet tougher regulatory standards.
Deutsche Bank said revenue in its corporate and investment bank unit fell 8 percent, to 6.2 billion euros, from 6.7 billion euros in the period a year earlier.
The bank also reported a decline in revenue at the division that serves retail customers, including Postbank in Germany. Revenue in the private clients and asset management unit fell to 3.4 billion euros from 4.1 billion euros.
The bank said it had reduced compensation costs by 622 million euros, in part because it paid employees lower bonuses.