All the big banks said 1993 dividends would be raised, underlining the extent to which the financial sector has side- stepped the deep recession ravaging manufacturing industry.
Hilmar Kopper, Deutsche Bank's chairman, said, however, that after some delay the bank was feeling the difficulties in corporate Germany and as a result was 'setting aside the highest amount it has ever deemed necessary for risk provisions'.
By the end of 1993 Deutsche will have raised its risk coverage to nearly DM3bn. Domestic lending business accounted for nearly 90 per cent of this provision.
The most spectacular earnings jump was recorded by Commerzbank, which reported a 52 per cent rise in 10-month operating profits to DM909m at the end of November. Dresdner, Germany's second- biggest bank after Deutsche, announced a 16.2 per cent increase to DM1.6bn, while Bayerische Vereinsbank posted a 27 per cent rise to DM992m.
Mr Kopper defended the banking sector's record earnings at the height of the toughest recession since the Second World War. He said: 'No banker in Germany need feel embarrassed. People should be happy there are still firms making money. What is wrong with profits?'
While their traditional lending business had been hit, all the big German banks recorded a doubling or tripling of earnings from financial transactions. Deutsche's net income on securities trading tripled to DM1.5bn.
Taking issue with the popular notion that the banks are immune to the recession, Mr Kopper said the increase in Deutsche's operating profit was because of foreign operations, notably subsidiaries in Luxembourg, Britain and Italy. The parent company's earnings in Germany had fallen by 9 per cent, eaten up mainly by the huge increase in risk provisions.Reuse content