Deutsche Bank (DBKGn.DE) expects revenue growth in 2025 across its investment bank and three other core business units, despite a challenging economic outlook in Germany and risks in the auto sector.
The latest forecast, published in the bank’s annual report, provides a detailed breakdown of its expected performance for the year ahead.
This outlook is particularly significant for CEO Christian Sewing, who is navigating profitability targets amid a weak domestic economy.
While the eurozone’s growth may accelerate slightly, the bank anticipates Germany’s economy to lag, highlighting key risks such as the automotive sector’s transition to electric vehicles and competition from China.
Auto sector risks grow
Deutsche Bank’s investment banking division was a major contributor to its revenue increase in 2024, growing by 15%. This helped drive a 25% rise in the bank’s total bonus pool to €2.5 billion.
The bank expects further momentum in 2025, bolstered by trading activity and corporate transactions.
However, economic uncertainty remains a concern, particularly in Germany.
The country’s automotive industry, a crucial sector for Deutsche Bank’s corporate lending portfolio, faces challenges from potential US tariffs, slow EV adoption, and intensifying competition from Chinese manufacturers.
The bank acknowledged that this segment presents a “growing risk” and is closely monitoring its auto and supplier exposure.
A weaker domestic economy could further strain carmakers and suppliers, impacting the bank’s loan portfolio.
Real estate stabilising
Another area of risk for Deutsche Bank in recent years has been its exposure to the commercial real estate market.
While challenges persist, the bank noted that the sector is showing signs of stabilisation.
This comes as global interest rate movements continue to impact property valuations and refinancing conditions.
Despite macroeconomic concerns, Deutsche Bank remains optimistic about its broader business strategy.
It continues to invest in digital transformation initiatives and operational efficiencies, which are expected to support revenue growth across its core divisions.
Cost-cutting measures and restructuring efforts may help the bank navigate economic headwinds in 2025.
CEO earnings rise
CEO Christian Sewing saw his total compensation rise to an estimated €9.75 million ($10.61 million) in 2024, up from €8.75 million in 2023.
The increase reflects Deutsche Bank’s improved financial performance and a shift in how bonuses are calculated.
The highest-paid employee at the bank earned between €17 million and €18 million.
Overall, Deutsche Bank’s workforce saw an 8% increase in total compensation, with employee earnings rising to €11.1 billion in 2024.
The bank’s annual report underscores its commitment to rewarding performance while maintaining cost discipline as it works towards long-term profitability targets.
While bonuses surged, Deutsche Bank has also been focused on improving efficiency, with continued cost-saving measures in place to balance spending.
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