Is this magnanimity really justified? It's a matter of debate. While investors are maintaining their vote of confidence in Christian Sewing, who took over as head of the German banking group in 2018, the annual results published yesterday call for a degree of circumspection. Indeed, even by trimming as much fat as possible, Deutsche Bank is still unable to solve its worrying cost problem.

Moreover, Christian Sewing said he was determined to reduce Deutsche Bank's dependence on its investment banking segment. We're still a long way from achieving this, since in 2024, the investment banking segment - which is excessively exposed to trading in fixed-interest products, a capital-intensive and unprofitable business - will still account for a third of consolidated sales.

It is this investment banking segment, moreover, which, benefiting from a highly volatile bond market with the tectonic shifts in interest rates seen over the last few quarters, is pulling the whole business upwards. Revenues rose by 15% in this segment, whereas they fell by 2% and 3% in the retail and corporate banking segments.

Consolidated profit was once again severely impacted by legal costs presented as "exceptional". The problem, as its shareholders know only too well, is that at Deutsche Bank these so-called exceptional charges have a furious tendency to recur.

As a result, costs will rise by 6% in 2024, more than revenues, which will increase by 4%. Provisions are up by a similar 22% this year, penalized by the recession in Germany and a fragile real estate market in the USA since the rise in interest rates.

As a result, net income is down 36%, and return on tangible equity pales in comparison with other major European banking groups, most of which ended 2024 with good results. 

The sector would appear to be on the verge of resurrection - but for the time being, this is taking place without Deutsche Bank, even if Christian Sewing and his CFO James von Moltke assure us that, like its peers, the group will soon be in a position to significantly increase its capital distributions to shareholders.

Barring any unforeseen cataclysms, MarketScreener analysts would not be surprised to see Deutsche Bank return at least EUR4.5 billion to its shareholders over the next two financial years 2025 and 2026. The recent jump in the Group's market capitalization to EUR37 billion shows that the market is betting on an even more optimistic scenario.

Shareholders have heard this refrain almost every year since the great financial crisis of 2008-2012. The challenge is structural: in addition to a corporate culture that lends itself to criticism, the largest bank in Europe's largest country remains trapped in a very difficult domestic market, a volatile investment banking business, and a balance sheet that carries fewer assets than that of Société Générale.