Deutsche Bank posts highest profit since 2007 after strong first half

Deutsche Bank on Thursday said it is on track to increase its profit this year following a surprisingly strong first half.

"We are very happy to have delivered our highest second-quarter and first-half year profits since 2007," said chief executive Christian Sewing during the presentation of the interim results in Frankfurt.

"This puts us on track to meet our 2025 targets."

Net profit attributable to shareholders reached nearly €1.5 billion ($1.7 billion) in the second quarter, exceeding analysts' expectations.

In the second quarter of 2024, the German lender had posted a loss of €143 million due to a provision related to a dispute over the acquisition of Germany's Postbank.

This time, Deutsche Bank benefited from higher revenues, lower costs, and reduced loan loss provisions, achieving a return on tangible equity of 10.1%.

For the first half overall, the return reached 11%, which surpasses the 10% threshold that Sewing aims to exceed this year.

Pre-tax profits for the half-year came in at €5.3 billion, around the same as for the whole of 2024, leading to a bottom-line figure of almost €3.3 billion, or almost three times last year's figure.

Net revenues rose to €16.3 billion, in line with a target of €32 billion for the year as a whole and above analysts' expectations.

All units – corporate, investment, private and asset management – contributed to group profitability.

Investment banking once again made the largest contribution to pre-tax profits. The unit includes consultancy on mergers and takeovers and bond trading.

Sewing has outlined a "Deutsche Bank 3.0" restructuring programme aimed at slimmed down management and the greater use of artificial intelligence (AI) resulting in reduced costs.

In March, the bank announced it was cutting 2,000 jobs this year and reducing its branch network.

Costs for the first half year were virtually flat at €10.1 billion, leading to a cost/income ratio of 62.3% in line with the target  of below 65% for the year. In 2023 and 2024, that ratio was more than 75%.

Deutsche Bank said it had completed most of its current €750 million share repurchase programme and had sought supervisory approval for a second share repurchase program in 2025.

"This would, if approved, enable capital distributions in excess of the €2.1 billion completed or anticipated in 2025 from dividends and share repurchases under the  current programme," it said.