Deutsche Bank AG Q1 FY2025 earnings call

Christian Sewing highlighted the volatile geopolitical landscape but emphasized the Global Hausbank model positions the bank well. He noted Q1 was a strong start with revenues up 10%. Progress on 2025 delivery includes a 6.1% compound annual growth rate in revenue since 2021 within target, 85% of €2.5 billion cost efficiency target achieved, and €4 billion in RWA reductions. The long-term management agenda focuses on increasing value generation for shareholders, reengineering the target operating model, and reinforcing leadership. The bank is well-positioned to assist clients in the changing environment with its diversified businesses and global network.

Deutsche Bank reported a strong first quarter 2025. Revenues reached €8.5 billion, up 10%, with pretax profit at €2.8 billion, a 39% year-on-year increase. Net profit was €2 billion, and return on tangible equity was 11.9%. The cost/income ratio stood at 61%. For segments: The Corporate Bank had pre-provision profit of €3.3 billion, up 34% year-on-year, with revenue momentum and cost discipline. The Investment Bank saw revenues up 10% year-on-year, bolstered by FIC. The Private Bank achieved a 43% increase in pretax profit, with net inflows of €6 billion and progress in transformation initiatives. Asset Management delivered materially improved profitability, with a 67% rise in pre-tax profit, and assets under management over €1 trillion with record net inflows of nearly €20 billion.

Management remains confident in achieving the full-year revenue objective of around €32 billion. They expect a material net interest income tailwind for key banking book businesses compared to 2024, driven by hedge rollover and deposit growth. The bank is committed to capital distributions, having announced €2.1 billion this year, and aims to surpass the €8 billion distribution target for the 2021-2025 period. They expect a return on tangible equity of greater than 10% in 2025 and beyond.

Geopolitical uncertainty and macroeconomic volatility pose risks. Tariff impacts on certain obligors could affect provision for credit losses. Market volatility in the FIC business may impact performance.

Q: Regarding Q1 revenue and business segment performance?

A: Christian Sewing stated Q1 was a strong start, with robust performance in the Private Bank, Asset Management, and signs of acceleration in the Corporate Bank.

Q: On FIC slowdown and outlook?

A: James Von Moltke said the FIC slowdown in early April was temporary, with the second half of April returning to normal, and the outlook remains positive due to portfolio effects offsetting negatives.

Q: On distribution and credit loss provisions?

A: Christian Sewing mentioned assessing a second tranche of share buybacks, and the €70 million overlay in credit loss provisions was related to macroeconomic variables and collective staging.