FRANKFURT—Deutsche Bank AG unveiled fourth-quarter results that shattered expectations, posting a net profit attributable to shareholders of €1.3 billion ($1.56 billion) for the period ended Dec. 31, 2025, surpassing analyst forecasts of €1.12 billion. The German lender’s achievement came just a day after federal prosecutors raided its offices in Frankfurt and Berlin over suspicions of money laundering tied to transactions from 2013 and 2018, casting a shadow over the triumph.

Group revenues reached €7.73 billion, aligning closely with LSEG estimates of €7.72 billion and marking a 7% increase from €7.22 billion a year earlier, as detailed in the bank’s official release. Fixed income and currencies trading fueled the performance, generating €2 billion in revenues—a 6% year-on-year rise and the division’s strongest quarter ever. Chief Financial Officer James von Moltke highlighted these “fantastic record years” for the fixed income and currencies business during a CNBC interview, crediting it alongside asset manager DWS and private banking growth.

Full-Year Triumph Caps Strategic Overhaul

For the full year 2025, Deutsche Bank reported record revenues of €32.1 billion, up 7% from 2024 and meeting its target of around €32 billion, according to Yahoo Finance coverage of the earnings call. Pre-tax profit hit €9.7 billion, with net profit at €7.1 billion, delivering a post-tax return on tangible equity (RoTE) of 10.3%—precisely on target for above 10%. CEO Christian Sewing declared the bank “delivered on all our 2025 targets,” supported by strong momentum across businesses, as quoted in the call highlights.

The results cap a three-year plan where Deutsche met key profitability goals, including compound annual revenue growth of 6% since 2021 within its 5.5-6.5% range. Noninterest expenses fell 15% year-on-year to €5.3 billion in the quarter, with adjusted costs at €5.1 billion, down 3%, per the bank’s statement. Credit loss provisions eased to €395 million, below expectations of €408.3 million.

Division Deep Dive Reveals Powerhouses and Pressures

The investment bank emerged as the top revenue generator in Q4, with 5% growth roughly in line with forecasts, as noted by Reuters. DWS reported record profits, overachieving targets with €4.64 in earnings per share and assets under management climbing to €1.08 trillion on €10 billion quarterly net inflows. Corporate Bank saw a 15.3% full-year RoTE and €25 billion deposit growth in Q4, while 126 branch closures aided workforce reductions of nearly 1,600.

Private banking showed steady expansion, though von Moltke acknowledged 2025 as a “slightly weaker year” for corporate activity, investment banking, and capital markets. CET1 ratio stood at 14.2% at year-end, down slightly from 14.5% in Q3 but up from 13.8% a year prior, after deducting €2.9 billion in proposed distributions.

Shareholder Rewards Escalate Amid Optimism

Deutsche proposed a €1.00 per share dividend—up 50% from €0.68 in 2024—totaling €1.9 billion, plus a €1 billion share buyback, forming a €2.9 billion package. Cumulative distributions for 2021-2025 will reach €8.5 billion, exceeding the €8 billion goal. Starting 2026, the payout ratio rises to 60%, with plans for further returns in the second half, subject to approvals.

Von Moltke expressed confidence in 2026, stating all four businesses are “really well positioned, intrinsically and in this environment.” He anticipates revenues around €33 billion, citing constructive markets absent disruptions and benefits from German fiscal expansion for corporate banking.

Raid Clouds Strategic Horizon

The earnings glow dimmed by the money-laundering probe, with prosecutors examining delayed suspicious activity reports. Von Moltke told CNBC, “The bank is cooperating with investigators… We’ve invested heavily over the years since in our financial crime risk management capabilities.” The investigation involves past transactions, but the bank deems its controls robust.

Analysts at S&P foresee continued earnings improvement for German banks beyond 2025, driven by lending tied to infrastructure and defense spending, as referenced in Reuters. Shares fell 1.6% to €32.32 post-results, reflecting probe concerns despite beats.

Path Forward: Efficiency and Expansion

Deutsche completed its €2.5 billion efficiency program and €31 billion RWA reductions by year-end, surpassing targets. From Q1 2026, it will cease separate adjusted costs reporting, focusing on noninterest expenses. Provisions are expected to trend lower, with resilient asset quality despite commercial real estate risks.

Sewing framed 2025 as laying “the strongest possible foundation for the next phase of our strategy,” positioning Deutsche as the “Global Hausbank” for sustainable growth. X posts from accounts like @FirstSquawk echoed the beats, highlighting FIC strength and buybacks amid real-time market reactions.