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Roula Khalaf, Editor of the Financial Times, curates her preferred stories in this weekly newsletter.
Quarterly Report: Deutsche Bank
Deutsche Bank recently reported its highest quarterly pre-tax profit in 14 years, while highlighting potential impacts from US tariffs. The pre-tax profit increased by 39% year-on-year, reaching €2.8 billion in the first quarter of 2025, surpassing analysts’ expectations by 7%.
The bank’s revenues rose by 10%, achieving the highest levels in a decade, driven by bond and currency trading amidst global market volatility. Operating costs declined by 2%, aided by reduced litigation charges.
Christian Sewing, the Chief Executive, stated that Deutsche Bank is on track to meet all 2025 targets, as it enters a significant period with its long-term strategy nearing expiration.
The bank’s return on tangible equity improved to 11.9% in the first quarter, three percentage points above the previous year and exceeding the 2025 target of over 10%. Additionally, the cost-to-income ratio, an important efficiency metric, improved to 61.2%, better than the 65% target.
Performance in the investment banking sector was supported by record revenues in the fixed income and currencies division, which grew 17% year-on-year. However, there was an 8% decline in origination and advisory revenues due to a significant writedown in leveraged finance.
Deutsche Bank’s results reflect a broader trend among global banks benefitting from market volatility induced by US tariffs, despite concerns over potential corporate defaults and weakened investments affecting sentiment.
Provisions for non-performing loans decreased by 27% year-on-year, yet overall credit loss provisions rose to €471 million, 16% higher than anticipated. The bank mentioned €130 million in provisions for performing loans, including overlays due to geopolitical and macroeconomic uncertainties in the US.
Christian Sewing warned staff of potential market impacts from a global trade war, expressing hope for no escalation but acknowledging that uncertainty and volatility are likely to persist.
