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In the last quarter of 2021, earnings based on preliminary figures were 798 million euros, as the company announced on Thursday evening. That would be almost a third more than a year earlier. For adjusted pre-tax profit, management expects EUR 378 million, an increase of 78 percent. According to its own statements, DWS thus clearly exceeded the expectations of the analysts it surveyed. DWS explained the good development with surprisingly high income from performance and transaction fees of 126 million euros as well as from management fees. The adjusted cost-to-income ratio (CIR) for the fourth quarter was 52.7 percent. A year earlier, it was significantly less favorable at 64.9 percent. The actual pre-tax profit is said to have jumped to 356 million euros. DWS intends to publish all business figures on January 27th, the annual report will follow on March 11th. A preliminary decision on the dividend has already been made: the shareholders should receive two euros per share for 2021 if the supervisory board agrees. For 2020, DWS had distributed EUR 1.81 per share. The main beneficiary is Deutsche Bank, which owns almost 80 percent of DWS shares.
Strong quarter of DWS helps to a liberation
A strong final quarter pushed shares in fund company DWS to their highest level since their record high in August on Friday. The price of the Deutsche Bank subsidiary at the daily high in the SDAX up to 39.38 euros. This made the stock one of the top values in the second-tier index of the DAX family. Ultimately, the share was still up 2.06 percent at EUR 38.70. Already on Wednesday, the stock managed to break the 200-day line, which signals the longer-term trend. Now she is setting herself apart from this line more and more. However, there is still a long way to go to the record high of just under 42 euros. According to the report, the fund company is said to have overestimated its information on sustainability criteria in asset management and thus engaged in greenwashing. There are initial investigations by the US authorities, which also include the SEC, citing people familiar with the matter. In addition, on the same day, an insider rumored that the Federal Financial Supervisory Authority (Bafin) was also investigating DWS in this context. All of this had reduced the stock market value of DWS by more than one billion euros in a single trading day. There was no news on this topic. Instead, market participants and stock experts concentrated on the key figures presented for the final quarter. And according to analysts, these were strong. The experts from RBC and Barclays praised the adjusted pre-tax profit in particular. This exceeded the market estimate by more than 40 percent thanks to surprisingly high income from performance and transaction fees. Jefferies analyst Tom Mills also wrote in an initial reaction of “remarkably strong figures”. The income from the performance fees was much higher than expected by experts on average. The analysts nevertheless discovered a drop of bitterness: they unanimously referred to the dividend proposal of EUR 2.00 per share for 2021. This was a negative surprise, since it was about ten percent below market expectations. FRANKFURT (dpa-AFX)
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Image sources: Olga P Galkina / Shutterstock.com, DWS
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