Rating action

Scope Ratings GmbH (Scope) has upgraded Deutsche Bank AG’s (Deutsche Bank) issuer rating and senior unsecured debt rating to A from A-, and revised the Outlooks to Stable, from Positive. The full list of rating actions and rated entities is included at the end of this rating action release.

The Upgrade reflects sustained progress in Deutsche Bank’s business model. This includes improved efficiency and profitability in the Corporate and Private Bank segments, robust revenue growth in the Investment Bank, and continued focus on containing costs to improve efficiency metrics, in line with the bank’s long-running ‘Global Hausbank’ strategy, recently updated via the ‘Scaling the Global Hausbank’ plan running until 2028. This is further underpinned by broadly stable asset quality, with overall contained cost of risk, and adequate financial metrics.

A more streamlined Investment Bank improves revenue predictability, via a greater emphasis on the sub-segment Investment Banking and Capital Markets (IBCM), including advisory and origination, which is projected to grow at a Compound Annual Growth Rate (CAGR) of over 15% until 2028 versus around 3% in Fixed Income & Currencies (FIC). Additionally, risk discipline has been strengthened in the segment. The Investment Bank will continue to contribute a meaningful share to total net revenues, with the bank planning to allocate a broadly unchanged share of tangible equity to the segment of around 38% in 2028.

Sustained progress in the profitability of other business segments contributes to an improved earnings mix. The Private Bank and Corporate Bank now represent more stable, profitable and streamlined segments that should provide a robust basis for operating performance. Profitability and efficiency metric have improved significantly in both segments between 2021 and 9M 2025, with RoTE standing at 10.5% in the Private Bank (vs 1.4% in 2021) and 16.0%in the Corporate Bank (6.8% in 2021). Until 2028, the bank targets an ambitious >18% RoTE in the Private Bank and >20% in the Corporate Bank. Finally, Asset Management will continue to play a key role in revenue diversification and longer-term growth ambitions.

Key rating drivers

Business model assessment: Resilient (High). Deutsche Bank’s issuer rating is anchored by its Resilient (High) business model. The bank operates a universal, international business model with four business segments. As the ’Global Hausbank’, it serves corporates, in particular large multinationals, with the full range of banking services and foreign exchange. In the Investment Bank, Deutsche Bank has a large international footprint in Fixed Income & Currencies operations as well as a growing revenue contribution from Origination & Advisory (which will be renamed Investment Banking and Capital Markets (IBCM)). The bank operates a retail segment (Private Bank) under the Deutsche Bank and Postbank brands, serving a diversified range of customers with potential for cross-selling. Finally, the business model is rounded off by the bank’s Asset Management offerings. The bank’s business model is diversified across segments and geographies, with some concentration on its home market in the Corporate and Private Bank. With total assets of EUR 1.39trn as of Q3 2025, the bank is Germany’s largest bank. However, its domestic market share is still relatively moderate, given Germany’s fragmented banking sector with large market shares in the savings and cooperative sectors.

The bank’s ‘Global Hausbank’ strategy, recently extended until 2028, and its track record of consistent implementation, supports the ratings. With a focus on boosting and diversifying revenue streams, containing costs and improving capital efficiency, the bank’s business model has strengthened over recent years. Implementation was supported by higher interest margins from mid-2022 and the bank’s interest-rate hedging strategy. The bank is on track to meet its 2025 targets, including a return on tangible equity (RoTE) of over 10% and a cost-to-income ratio (CIR) of below 65%, achieving a substantial improvement in performance over recent years.

Scope views the updated strategy as a prudent continuation of the current management’s long-term direction for the bank, with ambitious yet achievable goals that build on continued operating leverage via robust revenue growth, capital efficiency and targeted investments to expand market shares in select areas. Key targets by 2028 are a RoTE of over 13%, a CIR of below 60% and a CET1 ratio of between 13.5%-14.0%.

Operating environment assessment: Supportive (High). The assessment reflects Scope’s blended view of the different markets in which Deutsche Bank operates.

Germany (Supportive High) accounts for the majority of the bank’s exposure and revenues. As Europe’s largest economy, it benefits from high wealth levels and strong underlying resilience. Although the country’s export-oriented manufacturing sector continues to face multiple headwinds, contributing to stagnant growth in recent years. From 2026, real GDP growth is expected to recover, significantly supported by increased public investments. Despite a looser fiscal stance, Germany’s retains ample fiscal space, with overall manageable fiscal deficits and a relatively low debt-to-GDP ratio. The German banking sector is fragmented, dominated by cooperative and saving banking groups, and aggregate profitability remains low. The national legislative framework is stable and predictable.

Germany’s membership in the European Banking Union, has brought about a significant strengthening and harmonisation in bank regulation and supervision under the ECB’s Single Supervisory Mechanism, which Scope considers to be supportive of financial stability. The European Central Bank also shares with national central banks the role of lender of last resort, which reduces liquidity risks across the sector.

The Americas, primarily the United States (Supportive High), account for a sizeable share of Deutsche Bank’s net revenues (20% in 2024, mainly from the Corporate and Investment Bank). The assessment is supported by the size, wealth and competitiveness of the US economy the global role of the dollar, deep capital markets but also an effective lender of last resort framework, as demonstrated by the Fed’s liquidity scheme during the 2023 banking stress episodes. Scope’s views on the environment for banks operating in the US also benefits from a comparatively strong performance track record, although the metrics are influenced by the dominance of the five largest banks which account for about 60% of the system’s assets as at end-2024 while the rest of the system is highly fragmented. The US banking system also benefits from an effective, well-tested resolution framework for failing institutions. Scope sees the quality of banking regulation and the strength of the prudential supervisory framework as weaker than other developed banking systems, with significant gaps to Basel 3 standards.

Finally, around 15% of net revenues were from the United Kingdom (Supportive High) in 2024, predominantly driven by the Investment Bank. The UK is a large, wealthy and well-diversified economy. The country benefits from strong institutions, including robust financial, economic and monetary governance frameworks and an independent monetary policy. While rising government debt may constrain fiscal policy in the future, the regulatory framework for banks is robust and largely aligned with Basel standards. The Bank of England is a highly experienced and effective regulator and lender of last resort, underpinning financial stability. The generally sound operating performance of the UK banking sector continues to be supported by a relatively concentrated market and a high proportion of residential mortgage lending.

Scope arrives at an initial mapping of a based on a combined assessment of the issuer’s operating environment and business model.

Long-term sustainability assessment (ESG factor): Neutral. The assessment reflects Scope’s view that Deutsche Bank is actively embracing changes to ensure the long-term sustainability of its business model. While progress made may be tangible it does not warrant further credit differentiation.

Deutsche Bank is committed to improving its digital banking capabilities. Its Private Bank brand Postbank is positioned as a digital bank for younger customers. As part of its medium-term strategy, the bank is focussing on increasing the efficiency of its IT systems, including the decommissioning of legacy systems, as well as integrating AI to boost productivity, which would help the bank to actively steer its headcount via selective replacement of employees entering retirement. The migration of IT systems of Postbank into Deutsche Bank’s systems is well-progressed, with the mandate for the German Federal Financial Supervisory Authority’s (Bafin) representative ending in October 2025.

Deutsche Bank has committed to EUR 500bn in cumulative financing for sustainable projects from 2020 to 2025, growing to EUR 900bn until 2030. However, also given a slowdown in related lending in Germany in 2024/25, the 2025-target could be missed narrowly, with cumulative financing standing at EUR 440bn as of Q3 2025, with latest quarterly growth of EUR 23bn in Q3 2025. The bank’s updated transition plan sets decarbonisation goals for financed emission for 2030 and net-zero by 2050 for eight sectors (up from seven with the addition of Aviation in 2024) of its corporate loan book with high carbon intensity.

Governance considerations include Deutsche Bank’s inherent exposure to legal and litigation risks, given its large footprint in international payments, including in USD. Provisioning for legal risks for lawsuits related to the bank’s voluntary takeover offer for Postbank in 2010 and the associated share price significantly weighed on net results in 2024. Additionally, in Q2 2024, a former employee filed a EUR 152m claim in German Courts related to alleged career harm from Italian criminal proceedings. Deutsche Bank intends to contest the case, and no disclosure has been made on provisions or contingent liabilities. Finally, the bank has also advanced its remediation of money laundering, with the BaFin appointed monitor’s mandate not extended in 2024.

The long-term sustainability assessment leads to an adjusted rating anchor of a.

Earnings capacity and risk exposures assessment: Neutral. The assessment reflects Scope’s view that the group’s earnings capacity may be variable over economic cycles but is sufficient to cover expected losses. Asset quality is broadly in line with peers. Risks are unlikely to generate losses capable of undermining the issuer’s viability.

Deutsche Bank's improved profitability is the result of progress in the Corporate and Private Bank segments, coupled with contained risk costs. The bank aims to achieve a post-tax RoTE of over 10% in 2025, in line with 9M performance of 10.9%, and over 13% by 2028. Scope expects revenue to remain supportive, given net interest income remaining broadly stable at the currently relatively higher levels, given the bank’s hedging approach and modest volume growth. In addition, earnings capacity should be strengthened by net commission income. The bank is on track with the implementation of its efficiency programme running until YE 2025 and to meet its ambition for adjusted cost of around EUR 20bn in 2025, materially improved from 2024. The cost base is still somewhat elevated, with a CIR of 63% in 9M 2025, in line with its target of below 65%. In the medium-term, the bank aims at a CIR of below 60% by 2028, aligning it closer with peers.

Deutsche Bank’s asset quality is adequate, with a gross non-performing exposure ratio of 3.2% as of Q3 2025 (Stage 3 loans at amortized cost over total gross carrying amount of loans at amortized cost). Scope expects asset quality to remain broadly stable. Asset quality has suffered in recent years from a sluggish German macroeconomic environment, cyclical impacts from its CRE exposure, select larger corporate events and the temporary effects of the Postbank lending book integration. The bank’s capacity to absorb credit impairments is satisfactory. Credit loss provisions amounted to EUR 1.8bn (38 bp of average gross loans) in FY 2024 and EUR 1.3bn (36 bp of average gross loans) in 9M 2025. The bank projects around 30 bp in cost of risk in the medium-term, which would be well-covered by expected pre-provision profit.

Financial viability management assessment: Adequate. The assessment reflects Scope’s view that financial management provides some buffer and, under a base case scenario, could not imminently push any metric close to minimum requirements or jeopardise the issuer’s financial viability.

Deutsche Bank’s capitalisation is sound, with a CET1 ratio of 14.5% reported as of Q3 2025. The bank’s target CET1 ratio is at 13.5%-14.0%, which provides between 225-275bps of headroom to the bank’s minimum requirement of 11.25% as of Q3 2025. In its strategy running until 2028, the bank aims to maintain a target CET1 ratio of 13.5%-14.0% with a payout ratio of 60%. The leverage ratio of 4.6% at Q3 2025 is broadly in line with peers, although Deutsche Bank’s requirement is relatively high at 3.85%, partly due to its G-SIB status. The leverage requirement will decline by 25 bps in 2026, due to a decrease in the G-SIB buffer.

As part of its 2025 strategy, the bank has fully realised its targeted risk-weighted assets reduction of up to EUR 30bn by YE 2025. While the phase-in of the output floor has the potential to affect Deutsche Bank by 2030, Scope expects the bank to manage this transition, including via selective business growth, moderately higher usage of significant risk transfers (SRTs) and expansion of rating coverage, mostly for unrated corporates. Deutsche Bank’s funding and liquidity are robust, with a liquidity coverage ratio of 140% and a net stable funding ratio of 119% in Q3 2025.

One or more key drivers of the credit rating action are considered an ESG factor.

Outlook and rating sensitivities

The Stable Outlook reflects Scope’s view that the risks to the rating are balanced.

The upside scenarios for the ratings and Outlooks are (individually or collectively):

1. Continued and significant progress on structural cost efficiency and through-the-cycle profitability, combined with robust asset quality leading to an improved assessment of earnings capacity and risk exposure.
    
2. Sustained strengthening of capitalisation, in particular against regulatory requirements, while maintaining a solid funding and liquidity profile, triggering a more favourable assessment of financial viability management.

The downside scenarios for the ratings and Outlooks are (individually or collectively):

1. Weaker-than-expected execution of the bank’s strategy leading to a more volatile and narrower earnings mix and a less benign assessment of the business model.
    
2. A significant decline in profitability, increase in cost of risk, or slippage on cost management efforts triggering a negative revision of our earnings capacity and risk exposure assessment.
    
3. A material weakening in the bank’s funding or solvency position, including a weakening of the leverage ratio, leading to a less favourable assessment of financial viability management.

Debt ratings

Preferred senior unsecured debt: A/Stable. The rating is aligned with the issuer rating and applies to senior unsecured debt ranking above other classes of senior unsecured debt.

Non-preferred senior unsecured debt: A-/Stable. The rating is one notch lower than the issuer rating, reflecting statutory subordination. The rating also applies to legacy senior debt issued by German banks prior to the introduction of the senior non preferred debt class in 2018.

Short-term debt: S-1/Stable. Deutsche Bank’s S-1 short-term credit rating is derived from the long-term issuer credit rating. The rating is consistent with Scope’s long-term/short-term rating correspondence table. The choice of the highest possible short-term rating (S-1 given the A issuer rating) reflects the strength of the liquidity profile of the group and access to central bank funding (lender of last resort, ECB).

Environmental, social and governance (ESG) factors

Please refer to the ‘long-term sustainability assessment’ under the ‘key rating drivers’ section above for the ESG analysis.

All rating actions and rated entities

Deutsche Bank AG

Issuer rating: A/Stable, Upgrade and Outlook change

Preferred senior unsecured debt rating: A/Stable, Upgrade and Outlook change

Non-preferred senior unsecured debt rating: A-/Stable, Upgrade and Outlook change

Short-term debt rating: S-1/Stable, affirmed

Stress testing & cash flow analysis
No stress testing was performed. No cash flow analysis was performed.

Methodology
The methodology used for these Credit Ratings and Outlooks, (Financial Institutions Rating Methodology, 18 September 2025), is available on scoperatings.com/governance-and-policies/rating-governance/methodologies.
Information on the meaning of each Credit Rating category, including definitions of default, recoveries, Outlooks and Under Review, can be viewed in ‘Rating Definitions – Credit Ratings, Ancillary and Other Services’, published on scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Historical default rates of the entities rated by Scope Ratings can be viewed in the Credit Rating performance report at scoperatings.com/governance-and-policies/regulatory/eu-regulation. Also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): registers.esma.europa.eu/cerep-publication/. A comprehensive clarification of Scope Ratings’ definitions of default and Credit Rating notations can be found at scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Guidance and information on how environmental, social or governance factors (ESG factors) are incorporated into the Credit Rating can be found in the respective sections of the methodologies or guidance documents provided on scoperatings.com/governance-and-policies/rating-governance/methodologies.
The Outlook indicates the most likely direction of the Credit Ratings if the Credit Ratings were to change within the next 12 to 18 months.

Solicitation, key sources and quality of information
The Credit Ratings were not requested by the Rated Entity or its Related Third Parties. The Credit Rating process was conducted:
With Rated Entity or Related Third Party participation          YES
With access to internal documents                                         NO
With access to management                                                   NO
The following substantially material sources of information were used to prepare the Credit Ratings: public domain and Scope Ratings’ internal sources.
Scope Ratings considers the quality of information available to Scope Ratings on the Rated Entity or instrument to be satisfactory. The information and data supporting these Credit Ratings originate from sources Scope Ratings considers to be reliable and accurate. Scope Ratings does not, however, independently verify the reliability and accuracy of the information and data.
Prior to the issuance of the Credit Rating action, the Rated Entity was given the opportunity to review the Credit Ratings and Outlooks and the principal grounds on which the Credit Ratings and Outlooks are based. Following that review, the Credit Ratings and Outlooks were not amended before being issued.

Regulatory disclosures
These Credit Ratings and Outlooks are issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0. The Credit Ratings and Outlooks are UK-endorsed.
Lead analyst: Julian Zimmermann, Director
Person responsible for approval of the Credit Ratings: Marco Troiano, Managing Director
The issuer Credit Rating/Outlook was first released by Scope Ratings on 2 April 2014. The Credit Rating/Outlook was last updated on 13 December 2024.
The short-term Credit Rating/Outlook was first released by Scope Ratings on 22 May 2014. The Credit Rating/Outlook was last updated on 13 December 2024.
The non-preferred senior unsecured Credit Rating/Outlook was first released by Scope Ratings on 2 April 2014. The Credit Rating/Outlook was last updated on 13 December 2024.
The preferred senior unsecured Credit Rating/Outlook was first released by Scope Ratings on 27 July 2018. The Credit Rating/Outlook was last updated on 13 December 2024.

Potential conflicts
See scoperatings.com under Governance & Policies/Regulatory for a list of potential conflicts of interest disclosures related to the issuance of Credit Ratings, as well as a list of Ancillary Services and certain non-Credit Rating Agency services provided to Rated Entities and/or Related Third Parties.

Conditions of use / exclusion of liability
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