Moody's confirms Deutsche Bank's rating, outlook for margin upgraded to positive

Investing.com—Moody’s has confirmed all ratings for Deutsche Bank AG, including its A1 long-term deposit rating, and has upgraded the outlook on the deposit rating from stable to positive.

The rating agency maintained Deutsche Bank’s baseline credit assessment (BCA) at baa2 and kept the outlook on its senior unsecured debt and long-term issuer ratings stable.

Moody’s noted that as Deutsche Bank launches its 2028 strategic plan, the bank’s “profitability structure has significantly strengthened and become more diversified, capital generation capacity has improved, liquidity buffers are robust, and risk management is conservative.”

This rating action reflects that, after years of transformation since 2019, Deutsche Bank’s earnings resilience, sustainability, and predictability have improved structurally. The bank now has a broader, more diversified earnings base and stronger profitability, narrowing the gap with higher-rated global peers.

Deutsche Bank’s 2028 plan aims to generate approximately 37 billion euros in revenue, up from 32.1 billion euros in 2025, while maintaining operating costs around 22 billion euros. Moody’s expects the bank to remain cautious in its risk appetite and to keep loan loss provisions at about 30 basis points of total loans throughout the cycle.

The bank’s funding and liquidity position remains a core strength, with a large and stable deposit base reducing reliance on wholesale funding. As of December 31, 2025, Deutsche Bank held an average of 260 billion euros in high-quality liquid assets, mainly central bank cash and level-one securities.

Approximately half of Deutsche Bank’s loans are to German corporate and retail clients, with conservative underwriting practices. Commercial real estate and leveraged debt capital market loans account for only about 5% of total loans.

The positive outlook on the long-term deposit rating reflects that if Deutsche Bank makes significant progress in achieving its 2028 plan, while maintaining prudent risk management, strong asset quality, and solid capital and liquidity metrics, there is potential for an upgrade.

Moody’s stated that further substantial progress toward mid-term targets, especially in continuously improving returns and enhancing capital generation capacity, could exert upward pressure on the ratings.

This article was translated with the assistance of artificial intelligence. For more information, please see our terms of use.