Deutsche and Santander warn over trouble ahead over Brexit

Two of Europe’s biggest banks voiced their concerns over Britain’s departure from the EU today, with Deutsche Bank warning it could have to go beyond the 9000 job cuts it has already announced and Santander ready for “heightened volatility”.

Germany’s biggest lender and Europe’s largest investment bank saw its second-quarter profits after tax almost wiped out as trading income slumped and restructuring charges soared.

“While our results show that we are undergoing a sustained restructuring, we are satisfied with the progress we are making,” said Deutsche’s British chief executive John Cryan.

“If the current weak economic environment persists, we will need to be yet more ambitious about the timing and the intensity of restructuring.”

At the same time the UK offshoot of Spain’s Santander warned that the slowdown seen in the run-up to the referendum would continue as consumer confidence was knocked.

It said it expected the margins it would earn in the second half would reduce and added: “The decision to leave the EU has led to further economic uncertainty and financial market volatility.

“In the near term, this could result in lower consumer confidence that would be negative for continued economic growth. The lower value of GBP sterling, when combined with the pick-up in oil prices, is likely to lead to higher inflation.” Santander UK’s first-half pre-tax profit rose 7% to £989 million on net interest income flat at £1.8 billion.

Deutsche’s profits after tax plummeted from €796 million to €18 million. Revenues fell from €9.2 billion to €7.4 billion.

Restructuring and redundancy costs jumped to €207 million and there was a €285 million writedown on goodwill from businesses it has got rid of.

It warned: “Following the UK referendum, the global banking sector will need to be prepared for heightened volatility.”