This is not exactly a time that investors would expect some of the underperforming banks to be out with good news. Deutsche Bank A.G. (NYSE: DB) managed to beat analyst expectations on revenue and net income for the preliminary look at first quarter of 2020. The bank’s formal earnings report is set to be released on April 29, 2020.

Deutsche Bank reported that it sees a pretax profit of €206 million and net income of €66 million. Its revenue was seen at €6.4 billion. The bank’s noninterest expense was shown to be €5.6 billion (including €500 million contributed to its Single Resolution Fund) and the provisions for credit losses are expected to be about €500 million.

Where the story gets complicated is that Deutsche Bank increased its reserves for credit losses to what may be the highest in six years. Deutsche Bank also lowered its minimum capital targets as it deals with the economic destruction under COVID-19, which would take the bank under its Common Equity Tier 1 (CET1) target of at least 12.5% as larger drawdowns of existing credit agreements are taking capital out of the bank. That said, the CET1 ratio fell to 12.8% at the end of the first quarter from 13.6% at the end of 2019.

It was true that Deutsche Bank and its customers were becoming healthier, but many of its exporting customers have been under some of the same lockdowns or supply chain disruptions as U.S. and Chinese companies have seen. Deutsche Bank also has lowered the value of some of its leveraged loans.

Deutsche Bank’s press release also showed that the bank was reviewing its 2020 targets in light of the current macroeconomic conditions, noting that the short-term implications of COVID-19 make it difficult for the bank to reflect accurately the timing and magnitude of changes to its original capital plan. Credit extension to support its clients could increase its risk-weighted assets for several quarters, and the bank believes it is unlikely to reach its 2020 target of a 4.5% fully loaded leverage ratio.

S&P had just put Deutsche Bank’s credit rating at Negative from Stable last week.

Deutsche Bank shares traded as much as 13% higher in European trading, but after about 30 minutes of New York trading, the American depositary shares were up about 9.2% at $6.50 in active trading. They have seen a 52-week trading range of 4.99 to $11.16.

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