Deutsche Bank reports highest profit in 14 years

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Deutsche Bank has reported its highest quarterly pre-tax profit in 14 years but warned of the impact of US tariffs.

Pre-tax profit rose 39 per cent year on year to €2.8bn in the first quarter of 2025, exceeding analysts’ expectations by 7 per cent.

Revenues grew 10 per cent to the highest level in a decade, boosted by bond and currency trading amid heightened global market volatility. Costs fell 2 per cent, helped by lower litigation charges.

The results put Germany’s largest lender “on track for delivery on all our 2025 targets”, said chief executive Christian Sewing on Tuesday, as Deutsche enters a pivotal year with its current long-term strategy set to expire.

Return on tangible equity was 11.9 per cent in the first quarter, three percentage points higher than a year ago and comfortably above the bank’s 2025 target of more than 10 per cent.

Deutsche’s cost-to-income ratio — a key measure of efficiency — improved sharply to 61.2 per cent, down from 68.2 per cent a year earlier and beating the bank’s 65 per cent target.

The investment bank’s performance was underpinned by record revenues in the fixed income and currencies division, which rose 17 per cent year on year. This was partially offset by an 8 per cent decline in origination and advisory revenues, following a significant writedown on an unnamed position in leveraged finance.

Deutsche’s results echo a broader trend among global banks that have benefited from market volatility triggered by US tariffs, even as fears of rising corporate defaults and weaker investment have begun to weigh on sentiment.

While provisions for non-performing loans decreased 27 per cent year on year, overall provisions for credit losses rose to €471mn, 16 per cent higher than expected.

The bank cited €130mn in provisions for performing loans that included overlays “relating to uncertainties in the geopolitical and macroeconomic outlook in the US”.

“The shadow of a potential global trade war still looms over the markets”, Sewing warned in a message to staff. “And while we are hopeful that there will be no escalation, uncertainty and volatility are likely to remain high for the foreseeable future.”