EU FINANCIALS: Deutsche Bank (A1/A/A) - Q4 Results
Decent results, marginal credit positive. Ongoing legal expenses need to be controlled.
- Net interest income rose 12.4% QoQ and 13.5% vs Q4 23 to €3,659mn as interest expense fell faster than interest income - which seems to be becoming somewhat of a theme in banking results
- Commission & fee income was 9.3% higher QoQ to € 2,697mn - the IB did well, asset management and the corporate bank income being stable in 2024 vs 2023 will be a little disappointing but ultimately fine for creditors.
- Expenses are up sharply in 2024, which drives the net income miss this quarter, but this is due to specific litigation expense/provision of €1.7bn on Postbank and Polish fx mortgages - underlying expenses look reasonable and the outlook for 2025 is lower.
- Credit losses look fine at €420m, down €74m on Q3, mostly driven by stage 3. Taking a step back, provisions have increased from 25bps in 2022 to 38bps currently, which is worth a credit score grade at Moody's and S&P, but still strong on an absolute level. Credit investors would hope that losses stabilise below <40bps over the long run. There was a sharp increase in gross carrying amount in Stage 2 loans - while not concerning on its own is another negative in this category.
- CET1 is fairly flat at 13.8, helped by little RWA growth. The dividend and buyback should be affordable with CET1 growth in 2025 should expenses normalise
Analyst call at 11:00 UK time - https://investor-relations.db.com/reports-and-events/quarterly-results
Fixed income analyst call is tomorrow
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Historical bullets
SILVER TECHS: Bearish Cycle Remains Intact
- RES 4: $34.903 - High Oct 23 and the bull trigger
- RES 3: $33.125 - High Nov 1
- RES 2: $32.338 - High Dec 12 and a key resistance
- RES 1: $30.676 - 50-day EMA
- PRICE: $28.945 @ 07:58 GMT Dec 31
- SUP 1: $28.748 - Low Dec 19
- SUP 2: $28.446 - 76.4% retracement of the Aug 8 - Oct 23 bull cycle
- SUP 3: $27.686 - Low Sep 6
- SUP 4: $26.451 - Low Aug 8
A bear cycle in Silver that started Oct 23 remains in play. The metal has recently breached support at $29.642, the Nov 28 low. The break lower opens $28.446, a Fibonacci retracement. Note that moving average studies are in a bear-mode position highlighting a dominant downtrend. Key resistance has been defined at $32.338, the Dec 12 high. A break of this level would signal a reversal.
USDCAD TECHS: Bullish Flag Formation
- RES 4: 1.4667 2.0% 10-dma envelope
- RES 3: 1.4539 3.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4508 3.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4467 High Dec 19
- PRICE: 1.4367 @ 07:52 GMT Dec 31
- SUP 1: 1.4336 Low Dec 20
- SUP 2: 1.4277/4103 20- and 50-day EMA values
- SUP 3: 1.4011 Low Dec 5
- SUP 4: 1.3928 Low Nov 25 and a key support
USDCAD bulls remain in the driver’s seat and the pair is holding on to the bulk of its recent gains. The latest pause appears to be a flag formation - a bullish continuation signal. Note too that moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.4508 next, a Fibonacci projection level. Initial firm support to watch lies at 1.42779, the 20-day EMA. A pullback would be considered corrective.
GILTS: Opening calls
Gilt Opening call, 92.25.
- Also regarding the timing for the SETT price window, this should happen at 12:13-12:15 (GMT) for Futures and Options.
