Deutsche Bank Posts Highest Profit since 2007 Financial Crisis; Anticipated Cost Reductions Continue
In a significant turnaround, Deutsche Bank's restructuring program, Deutsche Bank 3.0, is delivering impressive results, as the German financial institution reported its highest profit since 2007. The bank's profit in the second quarter and the first half of the year amounted to nearly 5.3 billion euros, more than double the previous year [1][2].
The bank's equity return in the first half of the year surpassed its annual target, reaching an impressive 11 percent [1]. Moreover, dividends to shareholders could potentially exceed the previously planned 2.1 billion euros [1]. These achievements are supported by revenue growth of 6 percent year on year, in line with its 2025 revenue target of approximately €32 billion [1][2].
Key financial targets for 2025 are on track, including a post-tax return on tangible equity (RoTE) above 10 percent, a cost/income ratio around 63.6 percent, and flat operating costs despite investments and inflation [1][3]. Capital optimization is a priority. Deutsche Bank has completed most of its current €750 million share repurchase program and has applied for approval of a second share buyback in 2025 to enable capital distributions exceeding €2.1 billion for the year [1][2][3].
Regarding risk-weighted assets (RWAs), Deutsche Bank aims to reduce or eliminate the hypothetical impact from the output floor by 2030 through measures including low-cost mitigation, applying finalized CRR3 rules, and shareholder value add (SVA) optimization. Further mitigation strategies beyond 2030 involve increasing external ratings for unrated corporate clients, balance sheet optimization, and additional SVA activities, targeting 2033 [1][2].
The restructuring efforts include cost-saving initiatives, with about 90 percent of targeted operating efficiencies executed, offsetting inflation and business investments, and achieving around €25-30 billion in RWA reductions since 2021 [3]. As part of these efforts, around 2,000 jobs are expected to be cut and branch density is to decrease further by the end of 2025 [1].
All business areas of Deutsche Bank contributed to the record-breaking figures, with investment banking leading the way in M&A advisory services and bond trading [1]. Deutsche Bank's revenues rose by six percent to 16.3 billion euros, despite falling interest rates, and surpassing analysts' expectations [1]. The bank achieved a profit of nearly 1.5 billion euros in the second quarter, significantly above analysts' expectations [1].
CEO Christian Sewing stated that the bank is on track to achieve its targets for 2025 and aims to keep the cost-income ratio below 65 percent in the long term [1]. The cost-income ratio fell to 62.3 percent, a milestone, compared to spending more than 75 cents for every euro of revenue in the years 2023 and 2024 [1]. The management is aiming for 32 billion euros in annual revenue, considered achievable at the current pace [1]. The bank's costs remained stable at 10.1 billion euros, excluding special items such as Postbank provisions [1].
Despite the bank's current success, the markets remain challenging. However, Deutsche Bank appears to be as healthy and profitable as it has been in a long time, providing a promising outlook for the future. The bank has submitted an application to regulatory authorities to buy back more of its own shares this year [1].
Sources: [1] Deutsche Bank (2025). Deutsche Bank 3.0 Progress Report. [2] Financial Times (2025). Deutsche Bank Delivers Record Profits. [3] Reuters (2025). Deutsche Bank Aims for Further Savings and RWA Reductions.
What about the potential for future investing in Deutsche Bank, given its impressive financial results and restructuring efforts? The bank's ambitious business plans, such as its aim to exceed €32 billion in annual revenue, a cost-income ratio below 65 percent, and further RWA reductions, could make it an attractive option for investors seeking lucrative returns.
