Deutsche Bank shares dropped more than 3 percent on Thursday morning after reporting lower-than-expected revenue for its first quarter at a time when banking stocks have seen sharp gains after centrist Emmanuel Macron emerged as the winner in the first round of French presidential elections last week.
The bank's revenue stood at 7.3 billion euros, a 9 percent drop compared to this time last year. This missed Reuters estimate of 8.05 billion euros. The German lender said the first-quarter earnings were hit by a negative impact of credit spreads. It added however that without such impact, revenues would have been broadly flat on a yearly basis.
Net income, however, doubled to 575 million euros in the first quarter, compared to 236 million a year ago.
This was the first earnings report since the lender completed an 8.5 billion-euro capital increase earlier this month.
Marcus Schenck, Deputy CEO and CFO of Deutsche Bank, told CNBC on Thursday that the first quarter was a "decent start" into 2017 and this year "isn't going to be a loss year".
"Last year from a reported revenue point of view, we had a positive revenue as a consequence of our credit spreads widening. This quarter is the opposite. Our credit spreads, which is our wanted outcome, have come down substantially," he said.
According to Schenck, the only arm of Deutsche Bank that is slightly down is the transaction banking business after the German lender exited a number of countries and high-risk clients.
The German bank has struggled over the last few years due to weak earnings, a low-interest rate environment and penalties on past misconduct. Earlier this year, the bank paid $7.2 billion to settle a U.S. Department of Justice claim it misled investors over its handling of residential mortgage-backed securities (RMBS).
Cost-cutting has been one of the main policies to overcome such difficult times.The bank has lowered adjusted costs by 5 percent on a yearly basis. So far, 130 branches out of planned 188 closures in Germany have been completed and, in one-quarter, the bank made 1600 people redundant.
It's been reported that the biggest German lender could move 4,000 jobs from the U.K. to the euro zone as a result of the British decision to leave the European Union. Schenck clarified to CNBC that this figure is at the higher end of the spectrum.
"We all do not yet know what's the implications of Brexit on the financial industry," he said, adding that the bank is having conversations with both the U.K. and the euro zone to understand what will happen to the financial services industry.
"We'd expect that there's a number of activities that have to be moved into the euro zone and for us obviously Frankfurt is the most natural place to go. How many that's going to be? Honestly, we don't know today," Schenck said.