Deutsche Bank’s profits have plummeted by 92% in the fourth quarter of 2024, a result that has prompted CEO Christian Sewing to signal potential restructuring moves. As reported by the Financial Times, the bank’s net profit attributable to shareholders fell to just €106 million, a sharp drop from €380 million in the same period a year earlier. The decline was driven by a €329 million charge linked to a long-running mis-selling scandal in Poland’s residential mortgage market.
In response to the significant profit drop, Sewing announced that the bank would unveil a new medium-term strategy later this year. He emphasized that “nothing is off limits,” indicating the possibility of reshuffling or even divesting from weaker business units in order to optimize capital use. Sewing further stated that Deutsche Bank would review its capital investments to ensure better utilization across its operations.
The bank also faced rising litigation costs, which contributed to missing its 2024 cost targets. To cope with this, Deutsche Bank revised its cost-to-income target for 2025 to 65% of income, higher than the previously set 62.5%. Despite the difficult results, Sewing expressed “firm confidence” that the bank would achieve its goal of a return on tangible equity exceeding 10% by 2025, even though some analysts have voiced concerns about the challenge of reaching this target.
Deutsche Bank also announced a €750 million share buyback program and proposed an increase in its dividend, up from €0.45 per share in 2023 to €0.68 per share for 2024, bringing total payouts to shareholders to €2.1 billion. The bank’s revenue for the final quarter of 2024 increased by 8%, largely driven by strong performance in its investment banking division, although its corporate clients and retail arms saw slight revenue declines.
Sewing outlined 2025 as a “year of reckoning,” aiming to position Deutsche Bank as “the European champion” by focusing on a leaner operational model and reducing headcount. While challenges remain, the bank continues to work on laying the foundations for future growth and stability.
