Strong year for Deutsche Bank overshadowed by fresh laundering probe

(Sharecast News) - Deutsche Bank reported its strongest annual performance in nearly two decades on Thursday, posting record profits in 2025 after hitting key financial targets, increasing shareholder distributions and benefiting from a standout year in fixed income and currency trading, even as results were overshadowed by a renewed money-laundering investigation.

Profit before tax rose 84% year on year to €9.7bn, the bank's highest since 2007, while net profit roughly doubled to €7.1bn.

Revenue increased 7% to €32.1bn, broadly in line with the bank's targets, supported by continued growth across all four business divisions.

The post-tax return on tangible equity reached 10.3%, meeting Deutsche Bank's long-stated goal, and the cost-income ratio improved sharply to 64% as non-interest expenses fell 10%, largely due to a steep drop in litigation-related costs.

Fourth-quarter results exceeded expectations, with profit before tax jumping to €2bn from €583m a year earlier.

Net profit attributable to shareholders came in at €1.3bn, beating forecasts, while revenues rose 7% to €7.7bn.

Fixed income and currencies trading delivered its strongest fourth quarter on record, with revenue up 6%, driven by foreign exchange and emerging-market activity, offsetting weaker conditions in advisory and capital markets.

All major divisions posted double-digit profit growth for the year.

The investment bank remained the largest contributor, with pre-tax profit rising 20% to €4bn, while the corporate bank, private bank and asset management arm also delivered materially higher earnings and improved returns.

Asset management revenues reached their highest level since the DWS listing in 2018, helped by strong inflows and performance fees, while private banking benefited from higher deposits and investment product demand.

The bank proposed €2.9bn in further capital distributions, including a €1 per share dividend and a €1bn share buyback, bringing cumulative distributions since 2022 to €8.5bn and exceeding its original commitment.

The CET1 capital ratio stood at 14.2% at year-end, up from 13.8% a year earlier, reflecting strong organic capital generation despite regulatory headwinds in the fourth quarter.

Deutsche Bank said credit quality remained solid, with provisions for credit losses down 7% for the year to €1.7bn, although fourth-quarter provisions for non-performing loans rose due to specific corporate and commercial real-estate exposures.

Deposits increased to €692bn, while assets under management across private banking and asset management grew by €124bn during the year.

The results came as German prosecutors searched the bank's offices in Frankfurt and Berlin as part of an investigation into alleged late filing of suspicious activity reports linked to transactions between 2013 and 2018.

Management said it was cooperating fully with authorities and stressed that the matter was related to historic activity.

Looking ahead, Deutsche Bank said it expected revenue to rise to around €33bn in 2026 and was targeting a post-tax return on tangible equity above 13% by 2028, alongside a lower cost-income ratio and a higher payout ratio.

At 1140 CET (1040 GMT), shares in Deutsche Bank were down 1.69% at €32.31.

Reporting by Josh White for Sharecast.com.