* Q1 net income 575 million euros, up 143 percent
* Q1 revenue of 7.3 billion, down 9 percent
* Core tier 1 equity at 14.1 percent
* Shares down 3.4 percent at 0723 GMT
(Adds comparison with Wall St peers, share price)
By Arno Schuetze
FRANKFURT, April 27 Germany's flagship lender
Deutsche Bank more than doubled its first-quarter net
profit to 575 million euros ($627 million), benefiting from
lower legal costs for past misdeeds and a rebound in debt
It beat an average of analysts' forecasts in a Reuters poll
of 522 million euros.
"Client engagement is strong, asset flows are returning
across the bank and activity is picking up. Our cost-cutting
efforts are starting to pay off, while we have reduced
complexity significantly," Chief Executive John Cryan said in a
statement on Thursday.
The bank has thrown out products such as securitised trading
and cut ties with thousands of clients in recent months.
Its shares were over 3 percent lower in early trade compared
with a flat German blue-chip index.
"Deutsche shares have risen by 10 percent over the last week
so investors are taking profits today," said Philipp Haessler,
analyst at brokerage Equinet, adding that negative aspects such
as decreased revenues also weighed on the stock.
Total revenues were down 9 percent at 7.3 billion euros in
the quarter. The bank's cost-income ratio decreased to 86
percent, still lagging peers, many of whom manage their business
with costs of 60 to 70 cents per each euro in income.
The bank's core tier 1 equity ratio rose to 14.1 percent
from 10.7 percent a year earlier, strengthened by an $8.5
billion cash call earlier this month.
The bank's litigation reserves fell to 3.2 billion euros in
the quarter, after it had booked record fourth-quarter sums for
settlements, including for the sale of toxic mortgages and sham
Provisions for possible future legal action were flat at 2.4
This month, the U.S. Federal Reserve fined Deutsche Bank
$157 million for violating foreign exchange rules and running
afoul of the so-called Volcker Rule on speculative investments,
leaving a probe into sanctions violations as the only large
remaining litigation issue, which it hopes to resolve this
Revenues at Deutsche Bank's cash-cow bond-trading division
rose 11 percent in the quarter as it benefited from a surge in
trading across interest rate products, commodities and foreign
exchange (FICC), while sales were down 10 percent in equity
Wall Street banks have also reported big gains in bond
trading, helped by investors adjusting their portfolios in
response to interest rate movements, elections in Europe and
Bond trading revenues at Deutsche's Wall Street peers rose
by an average 21 percent in the first
The U.S. banks sector rallied earlier this year on hopes of
simpler regulations and tax cuts under President Donald Trump's
administration. But momentum has diminished recently as
investors scale back some of those expectations.
Deutsche Bank slipped to sixth place for global FICC
trading by the end of 2016 from third in 2013, according to the
latest data from industry analytics firm Coalition.
($1 = 0.9169 euros)
(Reporting by Arno Schuetze; Editing by Georgina Prodhan and