Analysts at Warburg Research focused on the positive parts of Deutsche Bank AG (USA) (DB)’s earnings report. They call the bank’s capital ratio improvement during the fourth quarter “impressive.” Banco Santander, S.A. (ADR) (NYSE:SAN) also posted losses, but it would have posted profits if it didn’t have to deal with the charges it took during the fourth quarter.
Deutsche Bank AG (NYSE:DB) (ETR:DBK) shares are on the rise this morning after a mixed earnings report. Analysts are pointing out the positives in the report, with some even saying the bank has shown “impressive improvement” in some areas. Meanwhile the stock is up 3 percent at the New York Stock Exchange.
Analysts at Warburg Research issued a report to investors today, increasing their price target for shares of Deutsche Bank from $54.33 (40 euros) to $59.77 (44 euros) per share and giving it a Buy rating. They said the bank’s fourth quarter results were “burdened” by billions in losses on special items. However they note that the bank reported 14 percent growth in its operating revenues, which was almost in line with their expectations.
One of the biggest losses Deutsche Bank AG (NYSE:DB) (ETR:DBK) had to deal with during the quarter was litigation costs. It faced two major cases, including allegations of Libor rate fixing and liability in the Kirch lawsuit. The analysts said they believe the bank may “adjust its provisions for the Libor case and reflect new judgment in the Kirch lawsuit.”
Deutsche Bank reported improvements in its capital ratios of about 90 basis points during the fourth quarter. They said they are “optimistic” ahead of the bank’s release of its capital figure at the end of the first quarter of 2013. They also said the bank is “well on track to achieve its restructuring targets faster than expected.”
Deutsche Bank AG (NYSE:DB) (ETR:DBK) is just one of several stocks to be hit hard during the fourth quarter. Banco Santander, S.A. (ADR) (NYSE:SAN) also reported losses during the fourth quarter. It’s the largest bank in the Eurozone according to market value, and it saw net profits fall after writing off almost $26 billion from bad loans and property assets.
However, like Deutsche Bank, Banco Santander, S.A. (ADR) (NYSE:SAN) also would have had positive results if its massive charges were stripped out. Business Insider reports that the bank’s profits would have increased 2 percent if the bank didn’t have to deal with so many bad loans after the 2008 financial crash in Spain. The bank’s executives said that 2012 was a turning point and they expected a “marked increase in earnings” in 2013.
Shares of Banco Santander, S.A. (ADR) (NYSE:SAN) were down almost 4 percent at the New York Stock Exchange on Thursday.