Deutsche Bank Targets 13%+ 2028 Returns as Wealth, Corporate Bank Gain Momentum

Key Points

• Deutsche Bank is targeting more than 13% return on tangible equity by 2028, with management citing potential upside from net interest income, productivity gains, pension and capital reforms, and lower structural costs.
• Wealth management and the Corporate Bank are key growth drivers: wealth revenue rose nearly 8% with EUR 60 billion in net new assets during the first half, while the Corporate Bank is expected to deliver mid-single-digit or better revenue growth.
• The bank has reduced higher-risk commercial real estate exposure by roughly 40% to 50% and reaffirmed a 13.5%–14% near-term CET1 target, with excess capital distributions prioritized once the ratio is sustainably above 14%.

Deutsche Bank Aktiengesellschaft NYSE: DB CFO Raja Akram said the lender has started its 2028 strategy cycle strongly, citing a record first half, return on tangible equity close to 12%, continued asset gathering in wealth management and improved momentum in its Corporate Bank.

Akram said Germany’s macroeconomic backdrop remains complicated, but he characterized the direction of travel as encouraging. He pointed to a 50% increase in foreign direct investment last year, 0.3% growth in the second quarter, rising growth projections and positive corporate sentiment. He said the bank is seeing corporate activity through working-capital finance and loan-growth transactions, although confidence has been less consistently reflected among small and medium-sized enterprises.

Business momentum and revenue mix

Akram said Deutsche Bank’s revenue diversification is progressing, with 60% of revenue now coming from outside the Investment Bank. He said the bank’s Private Bank was performing at least as well as expected in asset gathering toward its EUR 1 trillion client-assets objective, while asset management continued to post strong long-term flows.

In wealth management, he said revenue grew by almost 8% and the bank brought in EUR 60 billion of net new assets in the first half. The potential effect of German pension reforms was not fully incorporated into the 2028 plan, Akram said, but such reforms could provide a tailwind by expanding investment avenues and encouraging more capital-markets investing rather than deposit holding.

For the Corporate Bank, Akram said the business began showing its expected turnaround in the second quarter. He expects the unit to exit the year with revenue growth in the mid-single digits or somewhat higher, with that trajectory becoming evident in the second half.

In the Investment Bank, Akram described fixed income and currencies as a durable franchise rather than an episodic business. He said the third quarter was tracking near the prior year’s record third quarter, excluding credit trading, which had been particularly strong a year earlier. With six trading days remaining in the quarter at the time of the discussion, he said overall Investment Bank revenue could be flat to slightly down year over year.

He said investment-banking advisory activity was strong in mergers and acquisitions, equity capital markets and debt capital markets, partly offset by loan capital markets due mostly to calendar effects. He expected the IBCM business to be roughly flat.

Rates, deposits and AI

Akram said Deutsche Bank’s EUR 14 billion net interest income guidance would likely be “slightly better” given the rate environment. However, he said the benefits of higher rates would emerge gradually because of the bank’s structural hedge. The upside should be greater in 2027 and 2028 as hedges roll over and reset at higher rates, while the structure also provides protection if rates decline.

On German deposit competition, Akram said new entrants, including fintechs and larger banks, have used promotional and teaser rates. He said those offers can cause short-term disruption but have not required Deutsche Bank to change its strategy. The bank has 18 million existing customers, he said, and its client relationships include investment products, transaction services and operating deposits in addition to deposit pricing.

Akram said the bank is deploying artificial intelligence in customer interaction through a Postbank tool that it plans to scale to the Deutsche Bank brand, as well as in transaction monitoring and credit underwriting. He said AI deployment is prompting the bank to redesign underlying processes, organizational layers and resource locations. While AI-related costs are increasing, he said management expects productivity benefits to more than offset them.

Credit quality and commercial real estate

Akram said the bank’s higher-risk commercial real estate exposure is down by nearly 40% to 50% from the start of the cycle. He said Deutsche Bank has reduced non-performing exposures and that its principal stress had been U.S. West Coast office properties rather than European real estate.

While the commercial real estate issue is not fully resolved, Akram said the bank has substantially reduced its exposure and reserved for a large portion of it. The gap between its stressed-loss scenario and actual reserves is now “very tiny,” he said. For the third quarter, he expects credit-loss provisions to fall between the first- and second-quarter levels, including an idiosyncratic Corporate Bank charge tied to a single exposure.

He said the bank has not seen pervasive stress in its German retail, Corporate Bank or Private Bank loan books, despite pockets of pressure in the economy.

Costs, capital and returns

Akram said 2026 remains an investment year, particularly in wealth-management advisers and Corporate Bank governance. He said Deutsche Bank has closed more than 100 branches and reduced headcount, while also identifying potential to improve its baseline structural cost base in later years beyond assumptions made at the investor day.

On capital, Akram reaffirmed Deutsche Bank’s near-term common equity tier 1 ratio target range of 13.5% to 14%. He said the bank would prioritize excess distributions once it is sustainably above 14%, though it must first reach that level. The bank increased its capital distribution target to 60% from 50% and has completed EUR 1.5 billion of distributions so far this year, including EUR 1 billion completed at the beginning of the year.

Akram said management would likely maintain a roughly six-month cadence for capital-return decisions. He reiterated that the bank views its 13%+ 2028 return-on-tangible-equity target as a floor, citing potential upside from net interest income, productivity, pension reform, capital reforms and structural costs. However, he said the bank intends to deliver on its 2026 commitments before making additional promises.

About Deutsche Bank Aktiengesellschaft (NYSE:DB)

Deutsche Bank Aktiengesellschaft is a Germany-based global financial services company headquartered in Frankfurt. Founded in 1870 in Berlin, the bank provides banking and investment services to corporations, institutions, governments, small and medium-sized businesses, and private clients across Europe and other international markets.

The company's principal businesses include Corporate Bank, Investment Bank, Private Bank and Asset Management. Its services include transaction banking, cash management, trade finance, lending, investment banking, securities sales and trading, foreign exchange, research, wealth management, retail banking and private banking.

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