Deutsche Bank Records Record-Breaking Profit Not Seen Since 2007 - German bank, Deutsche Bank, records its highest profit since the year 2007.
Deutsche Bank, Germany's leading financial institution, has reported a significant improvement in its financial performance for the first half of 2025. The bank's net profit nearly tripled compared to the same period last year, reaching almost €3.3 billion. This marks the bank's highest profit since 2007.
The bank's CEO, Christian Sewing, attributed the record profits to several key factors. One of the most significant was the non-recurrence of a substantial litigation provision related to the Postbank AG takeover, which had impacted previous years. In the previous year, a litigation provision of 1.3 billion euros had been recorded.
Another contributing factor was higher revenues. Net revenues increased by 3% to 7.80 billion euros in the second quarter, driven by a diversified and complementary business mix. The bank is on track to meet its full-year target of around 32 billion euros.
Cost reductions also played a crucial role in the bank's improved profitability. Noninterest expenses fell by 26% year-over-year, primarily due to the absence of the Postbank litigation impacts. Adjusted costs were down by 1%. This reduction in costs improved profitability by enhancing operating leverage.
Positive operating conditions, including high interest rates and increased market volatility, have contributed to better lending income and trading conditions. These favourable conditions have benefited European banks like Deutsche Bank.
The bank's cost-to-revenue ratio also improved significantly, consuming only 62.3% of its revenues in the first half of 2025, a significant improvement from the 75.3% reported in 2023 and 2024.
Sewing is confident that the bank will achieve its goal of reducing the ratio of costs to less than 65 percent this year. He also expressed satisfaction with the results, stating, "We are very pleased to have achieved the highest profit since 2007 in both the second quarter and the first half of the year."
The bank's investment bank, which includes advisory services for mergers and acquisitions and bond trading, once again contributed the most to pre-tax profits in the first half of 2025. In January, Sewing announced a new restructuring program called "Deutsche Bank 3.0" aiming to reduce costs through flatter hierarchies and increased use of artificial intelligence.
If approved, dividends and share buybacks could exceed the €2.1 billion previously expected for 2025. The bank has also applied to the supervisory authority for an additional share buyback for the current year.
Deutsche Bank increased its revenues by six percent in the first half of 2025 to €16.3 billion. The bank's headquarters is located in Frankfurt am Main, Germany. In contrast, the bank reported a loss of €143 million in the second quarter of 2024 due to a billion-euro provision in the dispute over the former Postbank acquisition.
In March, the bank announced plans to cut around 2,000 jobs and further reduce the number of branches. The bank's capital generation and efficiency remain strong, with a CET1 ratio of 11.0% and a CET1 capital buffer significantly above requirements. The return on tangible equity was 10.1 percent in the second quarter and 11 percent in the first half of 2025, surpassing Sewing's target of 10 percent for the current year.
EC countries could potentialy benefit from Deutsche Bank's increased profits, as the bank's focus on vocational training programs for its employees might create opportunities for collaboration with vocational training institutions across the EU. Additionally, Deutsche Bank's success in cost-cutting and investement banking could serve as a model for other businesses that are seeking ways to improve their financial performance.
