Deutsche Bank AG Q4 FY2025 earnings call

Management Statement and Operational Highlights

• Delivered revenues of EUR 32 billion in 2025, with compound annual revenue growth of 6% since 2021. Achieved EUR 2.5 billion in operational efficiencies, cost income ratio 64%.
• Pretax profit EUR 9.7 billion, net profit EUR 7.1 billion, post-tax return on tangible equity 10.3%. CET1 ratio 14.2% at year-end.
• Transformed into a simpler, more focused business with diversified revenue mix. Sustainable finance volumes EUR 98 billion in 2025, highest since 2021.
• Corporate Bank saw revenue growth >40% since 2021, Investment Bank repositioned with focused offerings, Private Bank delivered strong profitability and net inflows, DWS overachieved financial targets.

Segment Performance

• Corporate Bank: Closed 2025 with a post-tax return on tangible equity of 15.3% and a cost income ratio of 62%. Revenue growth over 40% since 2021. Fourth quarter revenues stable sequentially with strong deposit volume growth offsetting lower deposit margins.
• Investment Bank: Q4 2025 revenues increased 5% y-o-y, driven by FIC growth. FIC revenues up 6%, but IBCM revenues slightly lower in 2025 due to reduced advisory. IBCM pipeline strong in Q1 2026. Noninterest expenses flat y-o-y, provision for credit losses EUR 97 million.
• Private Bank: Disciplined strategy execution delivered 14% operating leverage, post-tax return on tangible equity 10.5% in 2025. Revenues EUR 2.4 billion, NII growth 10% y-o-y. Net inflows into assets under management EUR 27 billion in 2025. Noninterest expenses declined 11%.
• Asset Management (DWS): Overachieved financial targets in 2025, EPS EUR 4.64. Q4 2025 profit for tax improved 73% y-o-y, revenues up 25% y-o-y. Total assets under management EUR 1.08 trillion, net inflows EUR 10 billion in Q4 2025.

Guidance

• Expect full-year revenues in 2026 to increase to around EUR 33 billion, aided by banking book NII growing to EUR 14 billion and growth in net commission and fee income.
• Corporate Bank expected to see modest revenue increase with accelerating sequential growth. Investment Bank revenues slightly higher in 2026, IBCM revenues in line with growth strategy.
• Private Bank and asset management expected to see continued growth. Payout ratio increased to 60% in 2026, with share buybacks and modest dividend growth.
• Provision for credit losses expected to trend moderately downwards in 2026 relative to 2025.

Risks

• Geopolitical Uncertainties: Impact on revenue and operational performance.
• Commercial Real Estate Headwinds: Continued provisions and challenges in the CRE sector.
• Regulatory Changes: Potential impacts of FRTB and other regulations, though hopeful for positive developments.
• AML Issues: Ongoing investigation related to delayed suspicious activity reporting from 2013-2018, with cooperation ongoing but no impact on financial/strategic plans expected.

Question and Answer

• Q: Clarify revenue guidance for 2026, including FX and operating leverage A: Christian and Raja discussed continued growth in all businesses, with Corporate Bank seeing modest increase, Investment Bank revenues slightly higher, Private Bank and asset management expected to grow. FX assumptions around $1.18, operating leverage impacted by investments but underlying business momentum strong.
• Q: Excess capital usage and FRTB impact A: Raja mentioned plans for share buybacks in 2026, commitment to returning capital to shareholders. FRTB assumptions may be conservative, hopeful for positive regulatory resolution.
• Q: Deposit growth and competition A: Raja stated deposit growth strategies in Private and Corporate Bank are on track, unique value proposition and network give competitive advantage, with confidence in meeting/doubling deposit targets.
• Q: Asset quality and CLPs A: James and Raja discussed normalization of Stage 3 provisions, stable credit quality, and expected modest reduction in credit loss provisions in 2026, trending down to 30 basis points by 2028.
• Q: EUR 33 billion revenue guidance and capital return clarification A: Raja and Christian explained confidence in EUR 33 billion revenue through growth in all segments, with capital return plans including share buybacks from 2026 earnings, not 2025 earnings.
• Q: Private Bank fees and SRTs A: Christian expected continued growth in Private Bank, with momentum in investments and branch closures contributing to profitability. Raja discussed SRT plans to increase by ~25% over next couple of years, using SRT tool for capital and SVAs.
• Q: Revenue acceleration and CRE provision guidance A: Raja and Christian discussed growth drivers in Corporate Bank, Wealth Management, and Asset Management, with confidence in achieving targets. James provided insights on CRE provision guidance, expecting tail of cycle and gradual improvement.
• Q: NII guidance and asset quality on U.S. CRE A: Raja explained NII guidance drivers including hedge rollover and deposit/loan growth, with deliberate portfolio exits affecting margin. James provided color on U.S. CRE, noting loan sales and paydowns impacting LTVs, and careful risk management of data center exposures.
• Q: Margin in Personal and Corporate Bank, German stimulus A: Raja discussed ongoing margin trends, with deposit growth and SVA initiatives driving improvement. Christian provided insights on German stimulus, noting growing corporate activity and government reforms, with positive outlook on European growth and diversification.
• Q: Deposit competition and German stimulus impact A: Raja addressed deposit competition in Personal Bank, with campaigns and unique value proposition, and Christian provided updates on German stimulus, seeing growing corporate investment and borrowing activity due to reforms and geopolitical shifts.