Deutsche Bank, facing probe, posts biggest annual profit in nearly two decades

By Tom Sims and Matthias Inverardi

FRANKFURT, Jan 29 (Reuters) – Deutsche Bank on Thursday reported its largest annual profit since 2007 after a stronger-than-expected fourth quarter, as German federal police searched the bank for a second day in connection with an investigation into alleged money-laundering.

The results mark Deutsche’s sixth consecutive year in the black and reflected a strong performance from the investment bank, which was the biggest revenue generator in the quarter, with a 5% revenue increase, roughly in line with expectations.

The earnings were overshadowed by prosecutors’ searches at Deutsche Bank on Wednesday and Thursday into suspected money laundering.

Frankfurt prosecutors said that they were investigating as-yet unidentified individuals and bank employees.

CEO Christian Sewing said that the case was prompted by the alleged late filing of a suspicious activity report and that the activity in question involved transactions between 2013 and 2018.

“We are, of course, cooperating fully with the authorities,” he said.

The bank’s shares were 2.3% lower in mid-morning trade, following on from a drop on Wednesday.

STRONG FOUNDATION FOR NEXT PHASE OF STRATEGY

Deutsche’s 2025 financial year closed out a three-year financial plan in which the bank pledged and met a key profit target – known as return on tangible equity – of more than 10%.

“This gives us the strongest possible foundation for the next phase of our strategy,” Sewing said.

Germany’s largest bank recorded net profit attributable to shareholders of 6.12 billion euros ($7.3 billion) for 2025, helped by strength at its global investment bank.

That is above 2.7 billion euros a year earlier and slightly ahead of analyst expectations of nearly 6 billion euros.

For the fourth quarter, net profit was 1.3 billion euros, up from 106 million euros a year earlier. It topped analyst expectations for a profit of around 1.12 billion euros.

The bank also said it had authorised 1 billion euros in buybacks. For 2026, the bank expects revenues to grow to around 33 billion euros, up from 32.1 billion euros.

The bank is working towards a new 2028 profitability target of 13% that analysts currently think it may miss.

FIXED INCOME, CURRENCY TRADING BEAT EXPECTATIONS

Within Deutsche’s investment bank, revenue for fixed-income and currency trading business, one of the bank’s largest, rose 7% and beat expectations for a 4% rise. Revenue for the same business was up 7% at JPMorgan and 12% at Goldman.

At Deutsche’s retail division revenue was up 3%, slightly short of expectations for a 3.9% rise. The corporate bank saw a 2% fall in revenue, while analysts had forecast a drop of around 1%.

The credit ratings agency S&P said in a report last week that German bank earnings will continue to improve beyond 2025, in part helped by increased lending on the back of government spending plans for infrastructure and defence. In December, the agency lifted Deutsche’s outlook to positive.

($1 = 0.8345 euros)

(Reporting by Tom Sims, Editing by Thomas Seythal, Shri Navaratnam and Jane Merriman)