Deutsche Bank Aktiengesellschaft (NYSE:DB) used its fourth-quarter 2025 fixed income call to outline progress against its 2025 financial targets, provide balance sheet and funding updates, and discuss changes to its ratings and issuance strategy. Group Treasurer Richard Stewart led prepared remarks, with CFO James von Moltke and incoming CFO Raja Akram joining for Q&A.
2025 targets met; path to 2028 goals reiterated
Management said the bank delivered a post-tax return on tangible equity of 10.3% in 2025, meeting its full-year target of above 10% and framing it as an early step toward a greater than 13% RoTE goal by 2028.
Stewart said the combination of revenue growth and lower costs drove “significant operating leverage,” including 17% operating leverage in 2025 and a pre-provision profit of €11.4 billion, which he said was up threefold since 2021.
Business performance and momentum entering 2026
On business lines, Stewart said all four operating divisions improved cost-income ratios and profitability versus 2021, resulting in double-digit returns in 2025.
- Corporate Bank: Stewart said the unit delivered revenue growth of more than 40% since 2021. He said 2025 revenues were stable despite lower rates and FX pressures, supported by actions to increase fee income and a normalized interest-rate environment.
- Investment Bank: In fixed income and currencies (FIC), Stewart said targeted investments helped drive market-share gains and an 11% increase in client activity in 2025 versus the prior year. He also said the bank is repositioning investment banking and capital markets by investing in sector and product expertise to expand advisory and equity capital markets capabilities while maintaining its debt franchise.
- Private Bank: Stewart said transformation efforts improved the cost-income ratio to 70% and delivered returns above 10% in 2025.
- Asset Management (DWS): He said DWS attracted €85 billion of net new assets since 2021, with assets under management surpassing €1 trillion in 2025.
Looking ahead, Stewart reiterated management’s plan to improve return on tangible equity to above 13% and lower the cost-income ratio to below 60% from 64% in 2025, driven by focused growth, strict capital discipline, and a scalable operating model. He added that the bank sees upside if the environment develops positively and said 2026 is about executing next steps, citing an “encouraged” view based on the year’s start.
Net interest income, loans, deposits, and liquidity
Stewart said net interest income (NII) across key banking book segments and other funding was €3.4 billion in Q4 and €13.3 billion for the full year, describing the full-year result as in line with plans when adjusted for FX effects.
For 2026, the bank expects NII across key banking book segments to increase to around €14 billion, with the increase mainly driven by the structural hedge rollover, expected to yield around €600 million more in 2026 versus the prior year. Stewart said over 90% of that uplift is locked in through existing hedge activity, alongside targeted growth in deposits and loans.
On balance sheet trends, Stewart said loans grew by €5 billion in Q4 within operating businesses (adjusted for FX). He described underlying loan book quality as strong, citing growth in FIC financing driven by asset-backed financing, infrastructure lending, and an acquisition of an aviation portfolio, as well as continued growth in corporate bank lending within flow and structured trade finance. In the private bank, he said the bank continued targeted mortgage reductions as part of a “capital-efficient” balance sheet strategy.
Deposits rose by €29 billion in Q4 (adjusted for FX), with the largest growth in the Corporate Bank, particularly in sight deposits from corporate clients. Stewart said some normalization is expected in the first quarter, but he characterized the increase as evidence of client engagement and franchise strength.
Stewart also highlighted the liquidity position, including a liquidity coverage ratio of 144% and high-quality liquid assets (HQLA) of €260 billion, with 96% held in cash and level one securities. The net stable funding ratio was 119%, with available stable funding at €650 billion.
Capital, leverage, and MREL; CRE provisions discussed in Q&A
Deutsche Bank’s CET1 ratio was 14.2% in Q4, down 30 basis points quarter-over-quarter. Stewart said one-off effects accounted for 44 basis points of that change, including the discontinuation of the transitional rule for unrealized gains and losses on sovereign debt and an annual update of operational risk RWAs. He added that higher market risk RWAs reduced the ratio by eight basis points as trading activity normalized, while credit risk RWA growth was offset by a securitization. Stewart said capital generation contributed 21 basis points, reflecting strong fourth-quarter earnings net of AT1 coupon and dividend deduction.
The bank reported a leverage ratio of 4.6%, flat quarter-over-quarter. Stewart noted a six basis point impact from the end of the transitional OCI filter. He also said a 10 basis point reduction from higher cash and reverse repo was more than offset by a 13 basis point increase tied to a €1 billion AT1 issuance in November 2025 and other CET1 drivers. Stewart added that following an FSB decision to reduce Deutsche Bank’s G-SIB bucket from 1.5% to 1%, the 2026 leverage ratio requirement will be reduced by 25 basis points.
On loss-absorbing capacity, Stewart said the bank’s MREL surplus was €23 billion, down €3 billion in the quarter. He said the level remains comfortable and provides flexibility to pause issuing new eligible liabilities for at least one year.
In Q&A, von Moltke addressed commercial real estate provisions, saying the bank is “following the new facts on the portfolio” as it builds provisions, including lower appraisals, lease activity changes (such as tenant departures), and market valuations observed between appraisal updates. He said there was one larger single-name event classified as commercial real estate that was outside office. Von Moltke described the focal point as office, particularly West Coast office exposures in Seattle and Los Angeles, and said he remained cautious about calling a floor after what he described as prior “false dawns,” though he added that the bank would “hope” it is at the tail end late in the cycle.
Ratings, liability stack decisions, and 2026 issuance outlook
Stewart said Deutsche Bank has received two upgrades from each major rating agency since the start of its transformation and cited additional upgrades in 2025, along with Standard & Poor’s raising its outlook to positive in the fourth quarter, which he attributed to improving earnings and greater resilience.
He also announced two decisions:
- The bank will reduce senior non-preferred issuance volumes and will no longer seek to benefit from the notch related to Moody’s Advanced Loss Given Failure (LGF) analysis in its senior non-preferred rating. Stewart said this is a voluntary move intended to optimize the liability stack and cost of funding and aligns the bank with European peers. In Q&A, he said the change allows a rebalancing over time from senior non-preferred to senior preferred and leads to a managed reduction in headroom over TLAC and subordinated MREL requirements, while maintaining appropriate buffers.
- To streamline efforts and reduce costs, Deutsche Bank will discontinue its DBRS group mandate, focusing on Moody’s, S&P, and Fitch.
On funding, Stewart said total issuance in 2025 was €18.7 billion, within a target range of €15 billion to €20 billion, including roughly €3 billion in senior preferred and AT1 issuance in November and December. For 2026, the bank targets €10 billion to €15 billion of issuance, citing lower senior non-preferred volumes as the biggest driver. Stewart said the maturity profile implies “relatively modest” maturities of €11 billion to €12 billion per year over the coming years.
He also noted that the bank issued a €1 billion Tier 2 bond in early January and said it, along with the recent €1 billion AT1 security, achieved the tightest spreads since those debt classes were introduced. Stewart referenced an upcoming call decision for a sterling AT1 instrument callable in April 2026, saying the coupon would reset to roughly 8.2% and the decision would be made closer to the call date after considering capital demand, refinancing levels versus reset, FX effects impacting CET1, and market expectations. Finally, he said the bank updated its sustainable instruments framework to allow issuance compliant with the European Green Bond Standard, which it plans to use in coming months.
Akram, addressing what it means to become a “European champion,” said management views the 13% RoTE target as an intermediate step toward a longer-term goal, emphasizing market-leading positions in key segments and stronger relative returns versus European peers. He also said the bank aims to be an “AI-powered” institution and a “destination of choice” for talent, adding that management intends to provide progress markers on growth drivers and market share evolution over time.
About Deutsche Bank Aktiengesellschaft (NYSE:DB)
Deutsche Bank Aktiengesellschaft is a global banking and financial services company headquartered in Frankfurt, Germany. Founded in 1870 to support German foreign trade, the firm has grown into a full-service bank offering a wide range of banking, advisory and transaction services to corporate, institutional, and private clients. Over its history the bank has expanded internationally and developed capabilities across capital markets, investment banking, retail and commercial banking, and wealth management.
The bank’s core business activities include corporate and investment banking—covering financing, advisory, sales and trading, and capital markets services—along with private & commercial banking for individual and small-to-medium enterprise clients.
