Deutsche Bank's investment banking division reported a 59% jump in pre-tax profit for the first quarter of 2025, reaching €1.2 billion, as a surge in dealmaking and advisory fees boosted performance. The result significantly exceeded analyst expectations and outpaced many Wall Street rivals.
Strong Performance Across Key Segments
The German lender's corporate and investment bank (CIB) saw revenues climb 24% year-on-year to €3.5 billion, driven by a 38% increase in advisory fees and a 20% rise in debt origination. Equities trading revenues also rose 15%, while fixed-income trading remained flat.
According to Deutsche Bank, the dealmaking boom was fueled by a resurgence in mergers and acquisitions (M&A) activity, particularly in Europe and North America. The bank advised on several high-profile transactions, including the €15 billion merger of two European industrial firms.
Outpacing Rivals
The profit surge allowed Deutsche Bank to outperform competitors such as UBS and Barclays, which reported more modest gains in their investment banking units. Analysts attributed the outperformance to Deutsche Bank's strong franchise in debt capital markets and its focus on mid-market deals.
"We are seeing a broad-based recovery in investment banking, and Deutsche Bank is well-positioned to capture market share," said a banking analyst at KBW. The bank's return on tangible equity (RoTE) for the division improved to 14.2%, up from 9.8% a year earlier.
Cost Controls and Outlook
Deutsche Bank also benefited from cost-cutting measures, with non-interest expenses in the CIB rising only 2% despite higher revenue. The bank's overall cost-income ratio improved to 62%, compared to 68% in the same quarter last year.
Looking ahead, Deutsche Bank CEO Christian Sewing expressed confidence in the sustainability of the dealmaking recovery. "Our pipeline remains strong, and we expect continued momentum in M&A and capital markets activity," he said in a statement. However, some analysts cautioned that geopolitical risks and interest rate uncertainty could dampen the pace of growth in the second half of the year.
