For CEO Christian Sewing, it was the highest quarterly profit since he took office eight years ago. 'This performance is all the more remarkable because the geopolitical environment has become even more unstable since the beginning of the year - particularly due to the war in the Middle East,' Sewing explained. The Iran war began on February 28 with attacks by the US and Israel and has led to global economic turbulence.
LOAN LOSS PROVISIONS DAMPEN SHARE PRICE
However, the quarterly results failed to convince the stock market. Deutsche Bank shares lost more than two percent. 'While results exceeded expectations and the 2026 outlook was reaffirmed, the increase in loan loss provisions and the lower-than-expected CET1 ratio are dampening enthusiasm,' commented analysts at RBC. Industry experts at JP Morgan expressed similar views.
Provision for credit losses rose to 519 million euros from 471 million euros, exceeding the market expectation of 447 million euros. This included a buffer for macroeconomic uncertainties, the bank explained. The CET1 ratio, at 13.8 percent, remained within the operational target range of 13.5 to 14.0 percent, but fell below the analyst estimate of 14.1 percent.
CFO SEES BANK ON TRACK
'We remain fully convinced of our outlook for 2026 and beyond,' said the new CFO Raja Akram. The first-quarter figures provide a solid foundation for the targeted revenue level of 33 billion euros for the full year, the bank stated. It remains on track to achieve a strong operating result in 2026. In the investment bank, management now expects higher revenues than in the previous year, expressing a slightly more optimistic tone than before.
'I think we have positioned the bank to handle tensions, adversity, or economic disruptions,' Akram said. At the same time, clients in this environment are seeking more risk management and advisory services. 'In a way, we are there for them. And that has clearly helped our first-quarter results.'
Revenues grew by two percent to 8.7 billion euros. Post-tax return on tangible equity (RoTE) rose to 12.7 percent from 11.9 percent in the prior-year period. The cost-income ratio improved to 58.9 percent from 61.2 percent previously.
INVESTMENT BANKING WEAKENS
While the bank increased profits in private banking and asset management, the corporate bank and investment banking showed signs of weakness. The private bank increased its pre-tax profit by 39 percent to 681 million euros. In asset management, it rose by 37 percent to 279 million euros. In the investment bank, pre-tax profit fell by seven percent to 1.4 billion euros. In corporate banking, it declined by one percent to 623 million euros.
The fund subsidiary DWS recorded inflows and increased its profit. As revenues rose nine percent year-on-year and costs fell five percent, net profit jumped by a third to 264 million euros. Since the start of the Iran war, clients have reduced risk positions and invested 6.6 billion euros more in long-term managed DWS products, primarily in ETFs sold by DWS under the Xtrackers brand.
(Report by Jörn Poltz and Tom Sims, contribution by Anika Ross, edited by Myria Mildenberger. For inquiries, please contact our editorial office at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)
