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FINANCE

Deutsche Bank reports surprise quarter billion profit

Troubled German lender Deutsche Bank reported Thursday a surprise €256-million profit in the third quarter, compared with a loss of more than six billion in the same period last year.

Deutsche Bank reports surprise quarter billion profit
Photo: DPA

Deutsche outdid the expectations of analysts surveyed by Factset, who had predicted it would book a loss of €949 million between July and September.

The group said revenues increased to €7.5 billion, slightly up from 2015's third quarter, driven by 10-percent growth in its investment banking division.

Revenues declined in all other business areas, which Deutsche said was largely down to the “impact of the ongoing low interest rate environment”.

“We continued to make good progress on restructuring the bank,” chief executive John Cryan said in a statement.

Financial markets and politicians have been closely watching the fortunes of Germany's biggest lender as it goes through a painful restructuring and deals with the fallout of the financial crisis.

It was labelled “the most important net contributor to systemic risks in the global banking system” by the IMF in June.

CEO Cryan acknowledged the “unsettling” effect of a $14-billion fine demand from the US Department of Justice in September over Deutsche's role in the mortgage-backed securities crisis, news of which sent the bank's share price to historic lows of €9.90.

“The bank is working hard on achieving a resolution of this issue as soon as possible,” Cryan said.

A source told AFP in late September the bank was in talks with the DoJ to reduce its fine to around €5.4 billion, although the final figure could change.

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MONEY

Where in Germany do people have the highest disposable income?

An economic study has shown huge regional differences in income throughout Germany. So which parts of the country have the most to spend each month, and which are feeling the squeeze?

Where in Germany do people have the highest disposable income?

A study by the Economic and Social Sciences Institute (WSI) of the Hans-Böckler foundation reveals stark regional differences in disposable income in Germany. In some cases, households had as much as double the spending money of those in other parts of the country. 

Here’s where people have the most – and least – disposable income each month.

What is disposable income?

The WSI calculated disposable income as the sum of income from wealth and employment, minus social contributions, income taxes, property taxes and other direct benefits or taxes.

What’s left is the income which private households can either spend on consumer goods or save.

The study, which was based on the most recent available national accounts data for 2019, looked at the disposable income of all of the 401 counties, districts and cities across Germany.

Which regions have the highest and lowest disposable incomes?

The study found that the regions with the highest disposable incomes were in the southern states.

Heilbronn in Baden-Württemberg had the highest disposable income of all 401 German counties and independent cities – with an average per capita disposable income of €42,275. The district of Starnberg in Bayern followed in second place with €38,509.

READ ALSO: REVEALED: How much do employees really earn across Germany’s states?

By comparison, per capita incomes in the cities of Gelsenkirchen and Duisburg in North Rhine-Westphalia were less than half as high, at €17,015 and €17,741 respectively. These regions had the lowest disposable income in the country. 

The study also found that, more than thirty years since German reunification, the eastern regions continue to lag behind those in the west in terms of wages.

According to the WSI, the Potsdam-Mittelmark district is the only district in the former east where the disposable per capita income of €24,127 exceeds the national average of €23,706.

Do regional price differences balance things out?

The study also showed that regionally different price levels contribute to a certain levelling out of disposable incomes, as regions with high incomes also tend to have higher rents and other living costs.

“People then have more money in their wallets, but they cannot afford more to the same extent,” WSI scientist Toralf Pusch explained.

READ ALSO: EXPLAINED: When will Germany raise the minimum wage?

Therefore, incomes in the eastern states, adjusted for purchasing power, are generally somewhat higher than the per capita amounts would suggest.

That could explain why, even after price adjustment, the cities of Gelsenkirchen and Duisburg in western Germany continue to be at the very bottom of the list.

Saxon-Anhalt’s Halle an der Saale, on the other hand, which has an average disposable income of only €18,527, benefits from the lower prices in the east.

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