Deutsche Bank posts quarterly profit beat amid uptick at its investment bank

• Deutsche Bank's net profit reached 1.485 billion euros ($1.748 billion) in the second quarter, compared with a 1.2 billion forecast from Reuters.
• The firm's core investment banking unit reported a 3% year-on-year hike in revenue to 2.687 billion euros in the June quarter.

Deutsche Bank on Thursday beat expectations on the bottom line, as mixed results at main units saw an uptick in its investment unit offset a dip in corporate operations.

Net profit attributable to shareholders reached 1.485 billion euros ($1.748 billion) in the second quarter, compared with a 1.2 billion forecast from Reuters.

The lender's revenues over the period reached 7.804 billion euros, in line with a mean analyst forecast of 7.76 billion euros produced by LSEG.

The firm's core investment banking unit reported a 3% year-on-year hike in revenue to 2.687 billion euros in the June quarter.

European banks overall are facing the challenge of navigating a lower interest rate environment, with the European Central Bank most recently bringing its key interest rate down to 2% in June and expected to hold that monetary policy during its meeting later in the Thursday session.

A recent German and broader European defense spending push has been supporting gains within the industry and offering new investment opportunities for European lenders. Speaking to CNBC's Annette Weisbach in late June, Deutsche Bank CEO Christian Sewing said that “we have clearly, in particular on the European side, been underinvesting” and stressed the lender has sized up both its portfolio appetite and resourcing to advise clients on defense ventures.

Domestically, the tumult that gripped German politics at the end of last year has quietened after snap elections awarded stewardship to a new ruling coalition under Chancellor Friedrich Merz. But the European Union's largest economy — and the third largest exporter globally — is now mired in trade uncertainty as the 27-nation bloc races to agree a tariff deal with U.S. President Donald Trump by an Aug. 1 deadline.

“If tariffs materialise in August, a recession in Germany in 2025 cannot be ruled out,” Bundesbank President Joachim Nagel said last week, according to Reuters.