Deutsche Bank Is Making Further Progress Toward a More Stable Operation

No-moat Deutsche Bank reported fourth-quarter profits before tax of EUR 775 million, versus consensus expectations of EUR 1.116 billion. Despite this miss, Deutsche Bank is making progress toward its overarching goal of building a more profitable bank. Excluding its capital release unit, profit before tax grew 37% to EUR 6.5 billion, driven by 7% revenue growth and a 3% smaller cost base. We increase our fair value estimate to EUR 12.9 per share from EUR 11 after rolling our model one year forward and incorporating these good underlying results.