FRANKFURT (Reuters) - Revenue at Deutsche Bank’s bond trading division fell 19 percent in the first quarter, it said on Friday, underscoring weakness at its investment bank a day after announcing the collapse of merger talks with Commerzbank.

Net revenue at its sprawling global investment bank, which accounts for more than half the German bank’s overall revenue and which relies heavily on its bond trading earnings, fell 13 percent to 3.3 billion euros ($3.67 billion).

The German flagship lender posted a net profit of 201 million euros, up 68 percent from a year ago but hardly making up for a net loss of 409 million euros in the fourth quarter as the bank battles stiff competition from U.S. powerhouses.

Deutsche’s bond trading performance lagged its U.S. rivals, whose fixed income trading revenue was down on average 7 percent in the first quarter, which was tough for the broader industry.

The bank had said on Thursday, when it announced that six weeks of talks with Commerzbank had failed, that it expected net profit for the first quarter of about 200 million euros, beating analysts’ expectations of 29 million.

UBS analysts wrote that “headline numbers are a beat on lowered and low expectations,” underlining the fragility of efforts to turn Germany’s biggest bank around after posting losses three out of the past four years.

The bank now expects revenue for the whole bank to be flat in 2019, scaling back previous expectations for a rise.

The cost-to-income ratio at the investment bank was 102 percent, up from 95 percent on average last year at the division. That is higher than 84 percent at the retail bank in the first quarter and 76 percent at the asset management unit.

A new leadership has tried to revive Deutsche’s fortunes, but the bank has faced hurdles that include allegations of money laundering, ratings downgrades and failed stress tests.

Christian Sewing, the bank’s chief executive officer, said the bank was “well on track” to meet its 2019 cost targets.

The bank said it was on track for a 2019 return on tangible equity of 4 percent, a key profitability target closely watched by analysts and the credit ratings agencies.

“Our first-quarter results demonstrate the strength of our franchise and our continued progress in executing our plans in a very challenging market environment,” Sewing said.

Deutsche is considered one of the most important banks for the global financial system, along with JPMorgan Chase, Bank of America and Citigroup.

But the German lender has been plagued by losses and a scandal. A $7.2 billion U.S. fine in 2017 for its role in the mortgage market crisis was a major blow that spooked clients and concerned regulators.

The story refiles and adds dropped word in paragraph 4