Deutsche Bank records its highest earnings since the year 2007
Deutsche Bank, one of Europe's largest financial institutions, has embarked on a comprehensive restructuring programme named "Deutsche Bank 3.0". Announced in January 2025, this initiative is designed to streamline operations, reduce costs, and improve operational efficiency.
Key elements of the programme include leaner management hierarchies, greater use of artificial intelligence, workforce reductions, and branch network rationalization. The bank aims to cut around 2,000 jobs this year and close branches as part of this restructuring.
This restructuring builds on earlier efforts, such as the 2024 operational efficiency programme, which targeted a cost reduction of €2.5 billion, with €1.8 billion already realised or secured by mid-2025 through workforce and contractor cuts.
The overall goal of these combined efficiency efforts is to significantly reduce operating expenses, with a focus on pruning legacy costs and reallocating capital towards more profitable business areas like wealth management and investment banking. Deutsche Bank aims to reduce its cost-to-income ratio to below 65% in 2025, down from above 75% in 2023 and 2024.
By improving efficiency and cutting costs, Deutsche Bank expects to strengthen profitability. The bank has already posted the highest quarterly profit in nearly 20 years, amounting to nearly 1.5 billion euros, and the return on tangible equity exceeded 10% in the first half of 2025.
In the first half of the year, Deutsche Bank's pre-tax profit more than doubled, reaching approximately 5.3 billion euros, and revenues increased by six percent, reaching 16.3 billion euros. The net profit was nearly 3.3 billion euros, almost three times as much as a year ago.
Investment banking was the most profitable business area in the first half of the year, contributing the most pre-tax profit. The profits were due to advisory services for mergers and acquisitions and trading in bonds. Deutsche Bank's private customer banking and fund subsidiary DWS also earned more in the first half of the year than in the previous year.
CEO Christian Sewing has set a target of 32 billion euros for the bank's annual revenues and now believes this goal is within reach. Sewing wants to exceed the 10 percent target for return on tangible equity this year.
If approved, dividends and share buybacks could exceed the previously expected total of 2.1 billion euros for 2025. Deutsche Bank has applied to the supervisory authority for a further share buyback for the current year.
In conclusion, Deutsche Bank's "3.0" restructuring targets thousands of job cuts, streamlined operations through AI and lean hierarchies, and branch closures, contributing to a total expected cost saving of at least €2.5 billion across recent efficiency initiatives, with €1.8 billion already achieved by mid-2025. This forms part of a strategic repositioning to boost profitability and focus on higher-margin business areas like wealth management.
Financing the job cuts and restructuring initiatives will require significant investing from Deutsche Bank, given their ambitious goals of reducing costs and streamlining operations. As part of this strategic business repositioning, Deutsche Bank aims to prioritize wealth management and investment banking, two areas that have demonstrated profitability in the recent past.
